The description of the relation between a company's assets, liabilities, and equity, which is expressed as Assets = Liabilities + Equity, is known as the:
A) Income statement equation.
B) Accounting equation.
C) Business equation.
D) Return on equity ratio.
E) Net income.

Question

Quizplus · Accepted Answer

The description of the relation between a company's assets, liabilities, and equity is known as the accounting equation, which is expressed as Assets = Liabilities + Equity. This equation is fundamental in accounting and helps to ensure that all financial transactions are properly recorded and balanced.

The Description of the Relation Between a Company's Assets, Liabilities