how to solve accounting equation

Hi

As per your question The accounting equation is taken into account to be the inspiration of the double-

entry accounting . The accounting equation shows on a company's record whereby the entire of all the

company's assets equals the sum of the company's liabilities and shareholders' equity.

Based on this double-entry system, the accounting equation ensures that the record remains

“balanced,” and every entry made on the accounting should have a corresponding entry (or coverage)

on the accounting .

Accounting Equation Formula

{Assets}={Liabilities}+{Owner's Equity})Assets=(Liabilities+Owner’s Equity)

Calculating the Equation

The record holds the idea of the accounting equation:

Locate the company's total assets on the record for the amount .

Total all liabilities, which should be a separate listing on the record .

Locate total shareholder's equity and add the amount to total liabilities.

Total assets will equal the sum of liabilities and total equity.

As an example, for instance for the financial year , leading retailer XYZ Corporation reported the

subsequent on its balance sheet:

Total assets: $170 billion

Total liabilities: $120 billion

Total shareholders' equity: $50 billion

If we calculate the right-hand side of the accounting equation (equity + liabilities), we reach ($50 billion

+ $120 billion) = $170 billion, which matches the worth of the assets reported by the corporate