Financial models are said to be in balance when
A) Net income is positive
B) Total assets equal total liabilities plus shareholders' equity
C) Total assets equal total liabilities less shareholders' equity
D) Cash flow is positive
E) None of the above

Question

Quizplus · Accepted Answer

Financial models are said to be in balance when total assets equal total liabilities plus shareholders' equity. This is known as the accounting equation, which represents the basic foundation of accounting and is the key to ensuring financial statements are accurately prepared.

Financial Models Are Said to Be in Balance When