The basic accounting equation brings the balance to the balance sheet.  Essentially it depicts where the funding for assets came from.

Assets = Liabilities + Equity

For example, a new homeowner buys a house for $100,000.  $10,000 is paid with cash (equity) and $90,000 is a loan from the bank (liabilities).  $100,000house = $10,000cash + $90,000loan.

The equation can be expanded by breaking down equity into contributed capital (owner’s equity) and revenue.