Elements of the Accounting Equation:
i.) Assets: Assets are those resources that are owned by the firm and are expected to generate future economic benefits. In other words, assets comprise cash, inventories, buildings, patents, and goodwill, belonging to the business enterprise.
ii.) Liabilities: Liabilities imply the obligation of a business firm. Instead, liabilities comprise short-term obligations like account payables and long-term obligations such as mortgages and bonds.
iii.) Equity: This is the residual interest in the assets of the business after minimizing liabilities. It is what represents the owner's claim on the company, which may emanate from initial capital investment, retained earnings, or even profits.

Elements of the Accounting Equation:
i.) Assets: Assets are those resources that are owned by the firm and are expected to generate future economic benefits. In other words, assets comprise cash, inventories, buildings, patents, and goodwill, belonging to the business enterprise.
ii.) Liabilities: Liabilities imply the obligation of a business firm. Instead, liabilities comprise short-term obligations like account payables and long-term obligations such as mortgages and bonds.
iii.) Equity: This is the residual interest in the assets of the business after minimizing liabilities. It is what represents the owner's claim on the company, which may emanate from initial capital investment, retained earnings, or even profits.