The balance sheet equation maintains equality by reporting the financial statement effects of each event and transaction in a dual manner, or what are termed the dual effects of transactions.

Question

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The balance sheet equation (Assets = Liabilities + Equity) is based on the concept of dual effects, meaning that every transaction or event has two sides, each impacting the balance sheet in opposite ways. This ensures that the equation remains balanced at all times.

The Balance Sheet Equation Maintains Equality by Reporting the Financial