Every accountants and bookkeepers are familiar with the basic accounting equation. This equation represents the value of business' assets (what the business owns), liabilities (what the business owes), and equity (ownership of the business). Every transaction involves the accounting equation as it should remain balance. Accountants and bookkeepers rely on this equation to ensure every transaction is correctly categorized. If the equation is not balanced, it indicates a transaction is incorrectly recorded.
An article from beginner-bookkeeping.com explained the principle of the accounting equation.
The article explained how transactions affect the accounting equation. Also, it is a simplifies how this equation is important to accountants and bookkeepers.
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