Answer:
The accounting equation is a formula that shows the sum of a company’s liabilities and shareholders’ equity are equal to its total assets (Assets = Liabilities + Equity). The clear-cut relationship between a company’s liabilities, assets and equity are the backbone to double-entry bookkeeping. The source of a company’s accounting equation numbers is its balance sheet. Equity can be Shareholders’ Equity, Stockholders’ Equity, or Owner’s Equity.
Like other equations, if two terms of the basic accounting equation are known, you can solve for the third term. For example, Total Assets – Total Liabilities = Total Equity, or Total Assets – Total Equity = Total Liabilities. You move a term from the right side to the left side of the accounting equation by using a minus sign.
Names meaning the same as Balance Sheet are Statement of Financial Position or Statement of Financial Condition.