We often heard Accounting being associated with Math subject. But, here you will see how basic the Accounting Equation is.
ASSETS = LIABILITIES + EQUITY
What are Assets, Liabilities, and Equity?
Assets: Resources owned with future economic benefit
Liabilities:
Obligations/Payables
Equity: The remaining value of the owners’ interest. Using the equation above, it is what remains after total liabilities are deducted from total assets
A net profit from your business will increase your Equity,
while a net loss will decrease it.
Now, let's get familiar with Debits and Credits on Double Entry Accounting