Assets = Liabilities + Equity. This single equation is the unbreakable spine of all accounting โ every transaction must keep both sides balanced.
accountingbasicsbalanceequityassets
Live Result
280,000
ฦ: liabilities + equityraw: 280000
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ฦ(x)
Use variable names from the panel above (e.g. FV, r, n) โ or type numbers directly: 10000 / (1 + 0.08)^10
liabilities
What the business owes to outsiders ($)
liabilities = 50000
equity
Owner's stake โ Assets minus Liabilities ($)
equity = 230000
assets
Everything the business owns or is owed ($)
assets = 280000
๐ก You can also enter values directly in the formula: 10000 / (1 + 0.08)^10
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โฌ Export Calculation
Exports a plain .txt file with your expression, formula, all variable values, result, and educational notes โ ready to paste into any report, Word doc, Notion, or Google Docs.
The exported file includes the formula in standard mathematical notation โ you can paste it directly into Excel, Google Sheets, or back into FinanceSheep.
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Learn: The Accounting Equation
PART VII โ ACCOUNTING ยท Educational Guide
The Core Idea
Jake runs a 200-acre corn farm in Iowa. Before he plants a single seed, his CPA explains the golden rule of bookkeeping: Assets = Liabilities + Equity. This equation never breaks โ every transaction Jake makes, from buying a tractor to selling a bushel of corn, leaves both sides perfectly balanced.
How It Works
Assets = Liabilities + Equity. Assets are everything the business owns or is owed. Liabilities are what it owes to others. Equity is the owner's residual claim โ what remains after settling all debts. The equation always holds because of double-entry bookkeeping: every transaction has two equal and opposite effects.
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Real-World Example: Jake's assets: farmland $160,000 + tractor $80,000 + seeds/fertilizer $30,000 + cash $10,000 = $280,000 total assets. His USDA farm loan = $50,000 liabilities. So equity = $280,000 โ $50,000 = $230,000 โ his net worth in the farm. Check: liabilities + equity = $50,000 + $230,000 = $280,000 โ