bilansivõrrand

Bilansivõrrand, also known as the balancing equation or equilibrium equation, is a fundamental concept in accounting and finance that represents the relationship between an entity's assets, liabilities, and owner's equity. It is the cornerstone of the double-entry bookkeeping system. The equation is typically expressed as: Assets = Liabilities + Owner's Equity.

This equation signifies that all the resources owned by a company (assets) have been financed by either borrowing money from others (liabilities) or by the owners' investment (owner's equity). Every financial transaction affects at least two accounts, ensuring that the bilansivõrrand remains in balance after each entry. For example, if a company purchases equipment using cash, its assets increase (equipment) and decrease (cash) by the same amount, maintaining the balance. If a company takes out a loan, its assets increase (cash) and its liabilities also increase (loan payable), keeping the equation balanced.

The bilansivõrrand provides a snapshot of a company's financial position at a specific point in time. It is the basis for creating the balance sheet, one of the primary financial statements. Understanding and maintaining the integrity of the bilansivõrrand is crucial for accurate financial reporting and informed decision-making. It helps stakeholders assess a company's financial health, solvency, and the proportion of its assets funded by debt versus equity.