Accounting Equation

Pronunciation: /əˈkaʊntɪŋ ɪˈkweɪʒən/

Definitions of accounting equation

noun a word that refers to a person, place, thing, event, substance, or quality

Example Sentences

A1 The accounting equation is used to balance a company's financial records.

A2 Students in the introductory accounting class are learning about the accounting equation.

B1 Understanding the accounting equation is essential for preparing accurate financial statements.

B2 The accountant analyzed the company's assets and liabilities to ensure the accounting equation was balanced.

C1 Professionals in the finance industry often refer to the accounting equation when making strategic decisions.

C2 The CFO presented a detailed analysis of the accounting equation during the board meeting.

Examples of accounting equation in a Sentence

formal The accounting equation, assets = liabilities + equity, must always balance in financial statements.

informal You always have to make sure the accounting equation adds up correctly in the books.

slang The accounting equation is like the math problem that never goes away in accounting.

figurative Think of the accounting equation as the scales of justice for your company's financial health.

Grammatical Forms of accounting equation

• plural: accounting equations
• present tense: is accounting equation
• future tense: will be accounting equation
• perfect tense: has been accounting equation
• continuous tense: is being accounting equation
• singular: accounting equation
• positive degree: accounting equation
• infinitive: to accounting equation
• gerund: accounting equation
• participle: accounting equation

Origin and Evolution of accounting equation

First Known Use: 1494 year

Language of Origin: Italian

Story behind the word: The accounting equation originated from the work of Luca Pacioli, an Italian mathematician and Franciscan friar known as the 'Father of Accounting'.

Evolution of the word: Originally introduced in Pacioli's book 'Summa de arithmetica, geometria, proportioni et proportionalita' in 1494, the accounting equation has evolved to become a fundamental concept in modern accounting, used to represent the relationship between a company's assets, liabilities, and equity.