Yes it is always true. The company pays for these resources by either incurring liabilities (which is the Liabilities part of the accounting equation) or by obtaining funding from investors (which is the Shareholders\' Equity part of of the equation). Thus, you have resources with offsetting claims against those resources, either from creditors or investors. All three components of the accounting equation appear in the balance sheet, which reveals the financial position of a business at any given point in time. The Liabilities part of the equation is usually comprised of accounts payable that are owed to suppliers, a variety of accrued liabilities, such as sales taxes and income taxes, and debt payable to lenders. The Shareholders\' Equity part of the equation is more complex than simply being the amount paid to the company by investors. It is actually their initial investment, plus any subsequent gains, minus any subsequent losses, minus any dividends or other withdrawals paid to the investors. You can see this relationship between assets, liabilities, and shareholders\' equity in the balance sheet, where the total of all assets always equals the sum of the liabilities and shareholders\' equity sections. The reason why the accounting equation is so important is that is always true - and it forms the basis for all accounting transactions. At a general level, this means that whenever there is a recordable transaction, you choices for recording it all involve keeping the accounting equation in balance. Solution Yes it is always true. The company pays for these resources by either incurring liabilities (which is the Liabilities part of the accounting equation) or by obtaining funding from investors (which is the Shareholders\' Equity part of of the equation). Thus, you have resources with offsetting claims against those resources, either from creditors or investors. All three components of the accounting equation appear in the balance sheet, which reveals the financial position of a business at any given point in time. The Liabilities part of the equation is usually comprised of accounts payable that are owed to suppliers, a variety of accrued liabilities, such as sales taxes and income taxes, and debt payable to lenders. The Shareholders\' Equity part of the equation is more complex than simply being the amount paid to the company by investors. It is actually their initial investment, plus any subsequent gains, minus any subsequent losses, minus any dividends or other withdrawals paid to the investors. You can see this relationship between assets, liabilities, and shareholders\' equity in the balance sheet, where the total of all assets always equals the sum of the liabilities and shareholders\' equity sections. The reason why the accounting equation is so important is that is always true - and it forms the basis for all accounting transactions. At a general level, this means that whenever there is a recordable transaction, you choices for reco.