Accounting equation state the relationship among the variables assets, liabities and owner equities

The relationship among the variables, assets, liabilites and owner equities is called accounting equation. This relationship is expressed as assets as the sum of liabilities and owner equities. Now let us discuss about  meanings of assets, liabilities and owner equities. Two things may have in an organization. That is organization owned and owed. The claims on organizations existing resourses is asset. In the resource of any organization two things may be included. One is owned by the organization and other is owed by the organization. The organization owed resources from others and others can can  claim on that resources to return him is called liabilities. The resources owned by the organization is called owner equities. The relationship of asset, liability and owner equity is important in accounting. The characteristics of asset is it can provide future benefit. Liability is the claim agaist asset. All types of payable, such as accounts payable, note payable are liabilities. Owner equity can find by asset minus liability. It is also called residual equity. Mathematically accounting equation express as Asset = Liabilities + Owner equities