What is Accounting Equation?

1- It is the basis of double entry system of accounting.
 2- It says that every transaction have two side effects.
 3- Recording of two aspects of each transaction.
 4- Assets and liabilities are two independent variables.
 5- Capital is the dependent variable.

Accounting transaction may affect both sides of the equation by the same amount or on one side of the equation only, by both increasing and decreasing it by equal amount and thus netting to ZERO.

Let’s assume that ABC introduces / invest money in business i.e (Capital/Owner Equity) for $ 100 on December 31, 2019, ABC’s accounting equation is;