Please reply to the following posts with a short response of your thoughts and option on there post.

Post #1

The accounting equation is assets equals liabilities plus owners' equity. Assets come from what resources the business already has. an example of an asset would be the equipment that the business uses. Liabilities are what the business owes to others. an example of this would be wages that the business has to pay to employees. Finally for owners' equity that is what's left over for the owner or shareholders after liabilities are taken out. The importance for this equation to be equal is to make sure that there is no error in the balance sheet.

Post #2

The accounting equation is [Assets = Liabilities + Equity]. Equity can be broken down in into four parts to expand upon the equation. Equity broken down to [Contributed Capital + Retained Earnings. The equation can also be broken down to [Assets = Liabilities + Common Stock Dividends + Revenues - Expenses]. (Wild & Shaw, 2021) All transactions are covered by the accounting equation and they must balance out. It is important for the for transactions to balance out because it is important for assets to balance out equity to ensure that accounting is accurate and effective.