RUTCNN Ue cen C AS CuLO NSU y NEDA Shue eee Nae THE ACCOUNTING EQUATION MIIGM1a4Smo m ean at come cles eaeacioe! eee eon a * The fundamental accounting equation which is used in analyzing transactions is ASSETS = LIABILITIES + OWNER'S EQUITY * Whenever there is a transaction, it is always analyzed in terms of the effects on the three accounts, assets, liabilities and capital.Accounting Equation * Assets — property and rights of value owned by the business * Liabilities — obligations to pay and claims of the creditors on the assets of the business * Owner's equity — interest of the owner onthe business, claims of the owners on the assets of the business and investment of the owner plus or minus results of operations. Prepared by M