The accounting equation is the basis on which the double-entry accounting system is built. The format of the accounting equation is that assets equal liabilities plus equity. Assets are the resources that in a business are available for use, there are two types of assets which are current assets and non-current assets. Current assets are less than one year old, such as cash, bank, etc. Non-current asset is the asset that lasts for more than one year, such as building and motor vehicle. While, liabilities are accounts payable to suppliers and as a variety of accrued liabilities, such as debt payable to lenders. Owner's equity is the amount paid by investors to the company, it is actually their initial investment plus net income and minus withdrawals from the business. The accounting equation is important because it is always true and forms the basis of all accounting