Accounting Equation Without Revenue & Expense

1. When a transaction occurs, the position of the assets, liabilities and owners’ equity may change but the following accounting equation is always maintained.

Asset = Owner’s Equity + Liability

2. The effect of a business transaction on accounting equation is such that it would invoke
(a) changes to the assets
(b) changes in owners’ equity
(c) changes to the liabilities

3. Balance sheet equation can always be maintained as follows: