To find the missing value in an accounting situation, you must use the fundamental accounting equation Assets = Liability + Owner’s Equity. One of the most important financial statements used in the world today is the balance sheet. The balance sheet summarizes a person or company’s asset, shareholder equity, and liabilities at a particular point in time. The balance sheet mainly depends on the fundamental accounting formula Assets = Liability + Owner’s Equity to make sure that every record is correct and accurate.
Accounting is designed as a method of keeping financial records correct and accurate. It can be used by everyone, including investors, creditors, financial analysts and even ordinary people to make sure that their financial accounts are balanced.
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