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Simon Michael
2024-04-11 11:37:54 -10:00
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@@ -71,16 +71,16 @@ Businesses usually merge Revenues and Expenses into their Equity balance at the
### What is the accounting equation ? ### What is the accounting equation ?
It is a simple formula that always holds true when bookkeeping is correct. A simple formula that always holds true when bookkeeping is correct.
You'll see it written in different ways, eg: You'll see it written in different ways, eg:
Equity = Assets - Liabilities - Equity = Assets - Liabilities
Assets + Liabilities + Equity = 0 (using PTA's sign convention) - Assets + Liabilities + Equity = 0 (using PTA's sign convention)
Equity = Assets - Liabilities - Equity = Assets - Liabilities
Assets = Liabilities + Equity + Revenue − Expenses - Assets = Liabilities + Equity + Revenue − Expenses
You can check the accounting equation for your accounts by inspecting an ALE balance report You can check the accounting equation for your accounts by inspecting an ALE balance report
like [`hledger bse`](https://hledger.org/dev/hledger.html#balancesheetequity). like [`hledger bse`](https://hledger.org/dev/hledger.html#balancesheetequity).