||The lead section of this article may need to be rewritten. The
reason given is: Needs a simple opening paragraph explaining
what the accounting equation is and why someone might want to
use it.. (September 2012)| The basic accounting equation, also
called the balance sheet equation, represents the relationship
between the assets, liabilities, and owner's equity of a
business. It is the foundation for the double-entry bookkeeping
system. For each transaction, the total debits equal the total
credits. It can be expressed as In a corporation, capital
represents the stockholders' equity. Since every business
transaction affects at least two of a company’s accounts, the
accounting equation will always be “in balance,” meaning the
left side should always equal the right side. Thus, the
accounting formula essentially shows that what the firm owns
(its assets) is purchased by either what it owes (its
liabilities) or by what its owners invest (its shareholders
equity or capital). In practice  For example: A student