Shadowing Practice: ACCOUNTING EQUATION: Explained in (Almost) 2 Minutes! - Learn English Speaking with Video

Creating lesson...
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In this video, I'll attempt to explain the accounting equation in less than two minutes.
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Start the clock.
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What is the accounting equation?
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The accounting equation is a formula that sets out the relationship between assets, liabilities, and equity.
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It says that at any given moment, a business's assets must equal its liabilities plus equity.
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You could call this the backbone of bookkeeping because the accounting equation always has to balance.
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The implication of this is that there are two sides to everything in accounting.
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Let me explain.
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The concept at the heart of the accounting equation is very simple.
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The stuff that a business owns is equal to the stuff that a business owes.
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A business owns assets and it owes liabilities and equity.
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What are assets?
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Imagine that you're the owner of a piggy bank.
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It's stuffed full of cash and all your prized possessions, which have a total value of $50.
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These are your business's assets, the stuff that it owns.
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In the real world, assets are things like cash, inventory and equipment, resources that a business uses to operate
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and generate profit but what about liabilities I said that liabilities
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and equity are the stuff that a business owes
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but to whom consider your piggy bank let's say
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that $20 of this cash was borrowed from a friend
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so it's not technically yours It's still an asset to your business
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but it also represents a liability because it's owed to someone else.
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So a business owes liabilities to third parties.
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This could be money owed to a bank, a supplier or the tax office.
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Liabilities are the debts or obligations that it needs to repay in the future.
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But a business also owes equity.
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Back to our example.
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Your piggy bank holds $50 in assets of which $20 are a liability owed to a friend.
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We know that the accounting equation has to balance.
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So that means your business also owes $30 to you.
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This is your equity in the business.
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So equity is the stuff that a business owes to its owners.
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We can see this more clearly by rearranging the accounting equation.
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Equity is equal to assets minus liabilities, which we call net assets.
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So equity is the owner's claim on the net assets of the business.
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It's what remains after all debts and obligations have been settled.
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We went over time there, dang it!
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So there you have it, the accounting equation is assets equal liabilities plus equity.
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I've summarized all of this on my free accounting equation cheat sheet which you can download here.
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And if you'd like to learn more about accounting, then why not watch this video next?
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Why Practice Speaking with This Accounting Equation Video?

Practicing with this video is a smart way to learn English with videos while building real-world vocabulary. The speaker uses clear, conversational language to explain a technical concept, making it ideal for shadowing (or "shadowspeak")—a technique where you repeat phrases aloud to mimic pronunciation and rhythm. By shadowing, you’ll improve fluency, learn how to explain complex ideas simply, and master everyday business terms. Plus, the short, engaging format keeps you focused, making practice feel less like work.

Grammar & Expressions in Context

The video is packed with useful structures for clear communication. Here are key ones to practice:

  • "The accounting equation is a formula that sets out the relationship...": This defining relative clause ("that sets out") is perfect for explaining terms. Use it to clarify what something is (e.g., "A dictionary is a tool that helps you find word meanings").
  • "Equity is equal to assets minus liabilities, which we call net assets.": The non-defining relative clause ("which we call") adds extra info without changing the main point. Practice this to add details smoothly (e.g., "My laptop, which I use for work, is five years old").
  • "Let's say that $20 of this cash was borrowed from a friend.": "Let's say" is a casual way to introduce examples, making your speech relatable. Use it to simplify explanations (e.g., "Let's say you want to bake a cake—first, you need flour and eggs").

Common Pronunciation Traps

Improve your English pronunciation by watching out for these tricky words in the video:

  • "Liabilities" (lye-uh-BIL-uh-tees): Don’t rush the "bil" sound—stress the second syllable. Mispronouncing this can confuse listeners in business contexts.
  • "Equity" (EK-wuh-tee): Avoid saying "ee-kwity"—the first syllable is short "e" (like "egg").
  • "Obligations" (ob-lih-GAY-shuns): Stress the third syllable ("gay") and keep the "b" soft. Many learners overemphasize the "lih" part, making it hard to understand.

Try shadow speech with the video: pause, repeat each phrase, and focus on matching the speaker’s rhythm. This will help you sound more natural and confident when using these terms.

Grammar in this video

The structures the speaker uses most, with the exact words from the video:

StructureIn the video
Present perfect have/has + past participle — a past action that still matters nowhave been settled · I've summarized
Passive voice be + past participle — the focus is on what happens, not who does itwas borrowed · have been settled

What is the Shadowing Technique?

Shadowing is a science-backed language learning technique originally developed for professional interpreter training and popularized by polyglot Dr. Alexander Arguelles. The method is simple but powerful: you listen to native English audio and immediately repeat it out loud — like a shadow following the speaker with just a 1–2 second delay. Unlike passive listening or grammar drills, shadowing forces your brain and mouth muscles to simultaneously process and reproduce real speech patterns. Research shows it significantly improves pronunciation accuracy, intonation, rhythm, connected speech, listening comprehension, and speaking fluency — making it one of the most effective methods for IELTS Speaking preparation and real-world English communication.

Shadowing technique: read the full step-by-step guide →