Explain assets, liabilities, and equity using the accounting equation.
Snapshot logic A balance sheet is anchored to a date. It does not say how much work happened during the month; it says where the business stands on that date. The three buckets Assets are controlled resources. Liabilities are obligations. Equity is the residual claim. Beginners often treat equity like spare cash, but cash is an asset; equity is the net claim after obligations. Use the equation Assets = Liabilities + Equity. Every entry should keep that equation in balance.
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