Example for accounting equation?

An example of the accounting equation is as follows:

Assets = Liabilities + Equity

Let's say a company has the following financial information:

- Total assets: $100,000
- Total liabilities: $40,000
- Total equity: $60,000

Using the accounting equation, we can verify if the equation is balanced:

$100,000 (Assets) = $40,000 (Liabilities) + $60,000 (Equity)

In this example, the accounting equation is balanced, which means that the company's total assets are equal to the sum of its total liabilities and equity.