ACCOUNTING EQUATION Definition

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ACCOUNTING EQUATION is a mathematical expression used to describe the relationship between the assets, liabilities and owners equity of the business model. The basic accounting equation states that assets equal liabilities and owners equity, but can be modified by operations applied to both sides of the equation, e.g., assets minus liabilities equal owners equity.

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SPONTANEOUS LIABILITIES are obligations that are realized automatically, in the course of operating a company day-to-day, when a company buys goods and services on credit.

PICPA is Pennsylvania Institute of Certified Public Accountants or Philippine Institute of Certified Public Accountants.

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