The Accounting Equation

External transactions data are analysed and coded according to the long-established conventions of the accounting equation and double entry bookkeeping. The logic of the double-entry system when applied to Financial Accounting relies on a view of the business as a financially accountable reporting entity, separate from its owners. The owners contribute funds to the business, and retain a claim over the assets of the business and any profit made by it, but business transactions are not mixed with the owners' private transactions. The business' managers are appointed to employ productively the assets entrusted to them as agents of the owners, and are accountable to the owners for their 'stewardship' of those assets.