Balance sheet equation

 The balance sheet consists of two sides, the first side, the assets side, and the second side, the liabilities and equity side, and the two sides should be equal in order for the budget to be balanced, and this is the budget equation

Assets = Liabilities + Equity

We deduce from this equation that: 

 Equity = Assets _ Liabilities 

Liabilities = Assets _ Equity 

That is, the sum of the uses of funds equals the sum of the sources of obtaining the th. Equity can appear in this equation sometimes in the capital item in the case of the sole proprietorship

That is, assets = liabilities + capital 

Equity rights have multiple elements, some of which are positive, such as capital, profit, needs and allocations, and some are negative, such as loss and withdrawals, and the net of these rights is the difference between the positive and negative side, noting that profit and loss do not meet in one financial period, and profit increases property rights and loss reduces Of property rights. What is meant here is net profit and net loss.

The accounting equation can be reformulated as: 

- Budget equation = assets + expenses = liabilities + capital + revenues. 

- Balance Sheet Formula = Assets - (Liabilities + Equity).

Capital = Assets - Liabilities 

The Financial Position List Law:

(Assets + Expenses) - (Liabilities + Equity + Revenue) = Capital.

Budget equation = liabilities + capital + (income_ expenses) + reserves + provisions _ withdrawals

Budget Equation = Liabilities + Capital + Revenue_ Expenses + Reserves + Provisions _ Withdrawals