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    Accounting Equation - Balance

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    What is the accounting equation? What does it tell you? Why does it have to balance? What happens if the equation does not balance? How does technology play a role in this?

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    Accounting equation:

    Assets = Liabilities + owner's equity

    i.e., resources and claims on the resources.

    Here, owner's equity means the share capital + revenues - expenditure + Gain - loss + contribution - withdrawals.

    The accounting equation tells us the how resources (both fixed assets and current assets) of the company is ...

    Solution Summary

    The answer contains the meaning of the accounting equation, need for balancing of the equation, the reasons for non-balancing of the equation and the role of technology (accounting software) in this regard.