Let us suppose that you wish to start your own business, Mobius Inc. The following transactions shown in examples Mobius (1) to Mobius (3) represent the first week of trading for the entity.
On day 1, you opt to put financial distance between you and the trading entity and transfer $1,000 from your personal bank account to a bank account you hold in the name of the new enterprise – Mobius Inc.
Assuming that the new business is a separate legal entity, how does this affect the accounting equation?
Assets Liabilities=Shareholders Fund(Your Injection Of Capital)
$1000 $0=$1000
NOTE: As you can see, the accounting equation captures both sides of the transaction and only by making the entry twice does the equation (and, by extension, the statement of financial position) balance.