In this area, we will discuss the significance of the accounting equation, the rules of debit and credit, and the steps in the accounting cycle.

PLEASE ADRESS THE QUESTION FIRST AND RESPOND TO THE DISCUSION:
WEEK 2: ACCOUNTING EQUATION, ACCOUNTING CYCLE, AND ACCRUAL ACCOUNTING
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In this area, we will discuss the significance of the accounting equation, the rules of debit and credit, and the steps in the accounting cycle. We will talk about recording of transactions, normal balances, and the creation of the trial balance.
Let’s begin by asking this question: What is the role of the accounting equation in the analysis of business transactions?

Response to the following discussion: PLEASE USE APA REFERECES FOR DISCUSSING THE ABOVE Questions also for responding the following: Thank you

The accounting equation is the total value of an organizations assets will always equal the combined value of its owner’s equity and liabilities. The actual formula is Assets= Liabilities Equity. The purpose of this accounting equation is to keep a check and balance within the organization. “When a business executes any transaction — a sale to a customer, a purchase, a debt payment, a stock sale — the accounting equation must remain in balance. If the equation isn’t balanced, this indicates that the analysis is incomplete or incorrect”(Merritt, 2020). The accounting equation needs to remain that same balance on both sides. It is an important tool for investors or lenders use to assess your company’s financial picture, the foundation of the balance sheet.

Merritt, C. (2020). Rules of a Double Entry Accounting Method. Retrieved 1 November 2020, from https://yourbusiness.azcentral.com/rules-double-entry-accounting-method-8339.html

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