The account format of the balance sheet matches the accounting equation. Assets are on the left side of the statement. Liabilities and equity are on the right side of the statement.

Question

Quizplus · Accepted Answer

The statement is correct. The accounting equation is Assets = Liabilities + Equity, therefore the format of the balance sheet is structured accordingly. Assets are listed first, followed by liabilities and equity, which are combined on the right side of the statement.

The Account Format of the Balance Sheet Matches the Accounting