TRANSACTION EFFECTS ON THE BASIC ACCOUNTING EQUATION (TAGALOG EXPLAINED) by RDS
Effect of Transactions on the Accounting Equation
As transactions occur within a business, the amounts of assets, liabilities, and owner's equity change. However, the overall equation always remains balanced.
The effects of changes in the items of the equation can be shown by the use of + or - signs placed against the affected items.
At this point, let's consider another example and see how various transactions affect the amounts of the elements in the accounting equation.
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