Ans. In accounting, assets, liabilities, and equity are interconnected through the fundamental accounting equation: Assets = Liabilities + Equity. Assets are resources owned by a company, such as cash, inventory, and property. Liabilities are obligations owed by a company, such as loans and accounts payable. Equity represents the residual interest in the assets of the company after deducting liabilities. It is calculated as the difference between assets and liabilities.