Why does a balance sheet balance (assets = Liabilities + OE)? a) It is required by law b) Companies force it to balance c) Accounting is a double entry system of equal debits and credits d) Auditors make adjustments to make it balance

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Q: Generally accepted accounting principles

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A:

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Financial Transaction Analysis

The transaction analysis is done with the help of the accounting equation. The basic accounting equation is alternatively known as the balance sheet equation is based on the double-entry system which says that for each transaction happening in a business, at least two accounts should be affected I.e. both the debit side and the credit side should be equal. The Accounting Equation is