The fundamental accounting equation states: Assets = ________.
A) liabilities minus owners' equity
B) liabilities plus receivables
C) payables plus cash equivalents
D) liabilities plus owners' equity

Question

Quizplus · Accepted Answer

The fundamental accounting equation is Assets = Liabilities + Owners' Equity. This equation must always balance, which means that the sum of assets must equal the sum of liabilities and owners' equity. This equation is the foundation of double-entry bookkeeping and is used to ensure the accuracy of financial statements.

The Fundamental Accounting Equation States: Assets = ________