The accounting equation may be written,
A) Revenues - Expenses = Net Income
B) Assets = Liabilities
C) Liabilities = Equity
D) Assets = Claims

Question

Quizplus · Accepted Answer

The accounting equation states that Assets = Claims. Claims include both liabilities and equity, which represent the sources of funding for the assets owned by the entity. The equation must always balance, meaning that the total assets must always equal the total claims (liabilities plus equity).

The Accounting Equation May Be Written