The accounting equation is calculated as:

Assets = Liabilities + Owner's Equity

Assets are economic resources of a company and four accounts associated with assets are cash, accounts receivable, inventory, and supplies. Liabilities are obligations owed from one company to another and accounts associated with liabilities are accounts payable, notes payable, unearned revenue, and wages payable. Owner's equity is the ownership in the company after all liabilities are settled and four accounts associated with owner's equity are common stock, preferred stock, additional paid in capital, and retained earnings.