Asset is equal to the total liabilities and owner's equity.

Assets, liabilities and owner's equity are the components of the accounting equation.

Assets are the resources borrowed by the owner.

If the business has liabilities it has obligations.

There are three elements that affect the equity account.

Investments affect the owner's equity account.

Assets and liabilities increase when the company purchases supplies on account

There is an increase in liability when you buy equipment on account.

If there is a PhP 500,000-worth of assets and PhP 200,000 worth of liabilities, then there is PhP 300,000 worth of owner's equity.

An increase in asset could be explained by an increase in owner's equity and decrease in liabilities.

A decrease in asset could be explained either by a decrease in liabilities or a decrease on owner's equity.

An increase in liabilities could be explained by a decrease in owner's equity.