Business & economics · University
Accounting equation · revision notes
A resource controlled by an entity from which future benefit is expected.
Key ideas and conditions
Asset
A resource controlled by an entity from which future benefit is expected.
Liability
A present obligation expected to require resources to settle.
Equity
The residual interest after liabilities are deducted from assets.
Accounting equation
The relationship Assets = Liabilities + Equity.
Explain without looking
- Give a short example showing how Equity would be used in practice.
- Summarize why Accounting equation matters in the lesson “Accounting equation”.
Further reading and review references
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