The accounting equation defines a company’s total assets as the sum of its liabilities and shareholders’ equity. It's the foundation of the double-entry accounting system.

Payroll affects every aspect of the accounting equation. In the most straightforward sense, money spent on payroll is money that offsets revenue and leads to lower net profit, fewer assets and ...

The fundamental accounting equation states that assets are equal to liabilities plus owners' equity. This is a critical concept in the double-entry system of accounting, which also requires that ...

The expanded accounting equation builds upon the basic accounting equation's use of assets, liabilities and equity by incorporating additional components such as revenues, expenses and withdrawals.