Basic Accounting Concepts - what am I missing?

Jim Smith jimsmth761 at
Sat Jan 1 23:50:18 EST 2011

When one writes the Accounting Equation in the form shown below, it
doesn't make any sense to me.
(Assets - Liabilities) + (Expenses - Income) = Equity

If I start off with 1 million in assets and no liabilities and then I
encounter 1 million in expenses and have no income, I should end up
with zero equity. The equation makes it seem like this scenario would
give me 2 million in equity.

What am I missing?

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