?What is the accounting equation, and why is it important

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The accounting equation is:

Assets
=
Liabilities
+
Owner’s Equity
Assets=Liabilities+Owner’s Equity
This equation is the foundation of double-entry accounting. It ensures that a company's financial records remain balanced.

Assets: What the company owns (e.g., cash, inventory, equipment).
Liabilities: The company’s debts or obligations (e.g., loans, accounts payable).
Owner’s Equity: The owner's investment and retained earnings.
The accounting equation is essential because it maintains financial accuracy and ensures that every transaction affects at least two accounts, keeping records balanced.

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