There is only one fundamental accounting equation, which is as follows:

Assets = Liabilities + Equity

This equation is also known as the balance sheet equation, as it forms the basis for creating a balance sheet. The equation states that a company’s assets must always equal the sum of its liabilities and equity.

Here’s a brief explanation of each of the components:

1. Assets: Assets are resources that a company owns and has the ability to use to generate future economic benefits. Examples of assets include cash, accounts receivable, inventory, and property, plant, and equipment.
2. Liabilities: Liabilities are obligations that a company owes to others. Examples of liabilities include accounts payable, loans payable, and accrued expenses.
3. Equity: Equity represents the residual interest in a company’s assets after deducting its liabilities. Equity can be further broken down into components such as common stock, retained earnings, and additional paid-in capital.

In summary, the accounting equation is a fundamental concept in accounting that represents the relationship between a company’s assets, liabilities, and equity.