How is the accounting equation composed? How is the accounting equation formed?

The accounting equation, also known as the accounting balance formula.

or accounting equations, which are the intrinsic economic relationships of the various accounting elements.

Make use of mathematical formulas.

made a general expression.

A static accounting equation is an accounting equation that reflects the financial position of a business at a particular date and is composed of static accounting elements (assets, liabilities, and owners' equity.

combined. The formula is "Assets = Liabilities + Owners' Equity".

The dynamic accounting equation is an accounting equation that reflects the operating results of an enterprise in a certain accounting period, and is composed of the combination of dynamic accounting elements (revenue, expenses, and profits). The formula is "Revenue, Expenses, and Profit".

Comprehensive Accounting Equation: Assets + Expenses = Liabilities + Owners' Equity + Income.

Accounting equation is an identity that indicates the basic relationship between various accounting elements, so it is also called accounting identity.

or accounting balance.

Assets = Liabilities + Owners' Equity.

This equation, known as the financial status equation, reflects the relationship between the three accounting elements of assets, liabilities and owners' equity, revealing the financial health of a business at a particular point in time. Specifically, it shows the various assets owned by the enterprise at a specific point in time and the basic status of the claims of creditors and investors on the assets of the enterprise, and shows that all the assets owned by the enterprise are provided by investors and creditors.

Revenue - Expenses = Profit.

This accounting equation, known as the financial results equation, reflects the relationship between the three accounting elements of revenue, expenses and profits, revealing the operating results of a business in a specific period.

Assets = Liabilities + (Owner's Equity + Income – Expenses).

This equation is a synthesis of corporate profit distribution.

The relationship between the pre-financial equation and the equation of operating results. Reveals the interconnectedness between a company's financial health and operating results.

The Commercial Press, English-Chinese Investment Dictionary

Explanation: Accounting equation.

In English, it is: accounting

equation。In the accounting process, the equivalence relationship between assets and liabilities. For example, the company's assets minus liabilities are equal to shareholders' equity.

The accounting equation is what Luca Pacioli wrote in Principles of Arithmetic and Geometry

Assets = Liabilities + Owners' Equity.

Accounting equation is a mathematical expression that reflects the economic relationship of each accounting element in accounting using mathematical formulas, that is, quantitative relations, also known as accounting equations, accounting balance formulas, and accounting identities. It is the theoretical basis for each accounting entity to set up accounts for double-entry bookkeeping and preparation of accounting statements.

The accounting equation suggests the connection between the accounting elements, which is the theoretical basis for double-entry bookkeeping, trial balance and the preparation of accounting statements, and the equation that reflects the quantitative relationship between the elements of the balance sheet is: assets = liabilities + owners' equity. The equation that reflects the quantitative relationship between the elements of the income statement is:

Revenue - Expenses = Profit.

The so-called accounting equation, also known as accounting identity, refers to the equilibrium formula that uses mathematical equations to indicate the basic relationship between various accounting elements. The accounting equation is the theoretical basis for setting up accounts, double-entry bookkeeping, trial balance, and preparing accounting statements.

The static accounting equation (basic accounting equation) is:

Assets = Equity = Creditor's Equity + Owner's Equity = Liabilities + Owner's Equity.

This is an equation that reflects the financial situation on a particular date.

The dynamic accounting equation is: Oak Cha.

Revenue - Expenses = Profit.

This is an equation that reflects the results of business over a certain period of time.

Combine the two to get:

Assets = Liabilities + (Owner's Equity + Income – Expenses).

Liabilities + Owners' Equity + Profits.

Assets + Expenses = Owners' Equity + Income.

The above equation shows that the income of a business can lead to an increase in the company's assets and an increase in the owner's equity, while the occurrence of expenses can lead to a decrease in the assets and the owner's equity.

The impact of the occurrence of economic transactions on the accounting equation is as follows:

1. The occurrence of an economic business may involve only one party of the assets and liabilities and the owner's equity, or it may involve both parties, but in any case, the result must be that the identity relationship of the basic accounting equation remains unchanged.

2. If the occurrence of an economic business involves only one of the assets and liabilities and the owner's equity, it will neither affect the identity relationship between the two parties, nor will it change the total amount of the two parties.

3. If the occurrence of an economic business involves both parties in assets and liabilities and owners' equity, although it will not affect the identity relationship between the two parties, it will cause the total amount of the two parties to increase or decrease in the same way.

Meaning of Accounting Basic Equation: Accounting equation, also known as accounting equilibrium formula and accounting equation, refers to an identity that indicates the basic relationship between various accounting elements.

Economic business, also known as accounting transactions, refers to transactions or events that increase or decrease accounting elements in economic activities. It can be divided into two categories: foreign economic business and internal economic business. Foreign economic business refers to the economic matters arising from the transactions between an enterprise and other enterprises or units.

For example, raising funds from investors, purchasing goods from suppliers, repaying loans from banks, selling goods to buyers, etc. Internal economic operations refer to the consumption of internal costs and expenses of an enterprise, as well as economic events arising from the adjustment between various accounting elements. For example, the depreciation of materials and machinery and equipment consumed in the process of production and operation, the distribution of wages and the carry-over of income and expenses.

The equation that reflects the quantitative relationship between the elements of the balance sheet is: assets = liabilities + ownership rights. The equation that reflects the quantitative relationship between the elements of the income statement is:

Revenue - Expenses = Profit. In addition, there are some other accounting equations, operating profit = operating income - operating costs - business tax and surcharge - selling expenses - management expenses - financial expenses - asset impairment loss + fair value change profit or loss + investment income;

Net non-operating income and expenditure = non-operating income - non-operating expenses;

Operating income = main business income + other business income;

Operating cost = main business cost + other business costs;

Net Profit = Gross Profit - Earned Bridge Tax Expense.