The description of the relationship between a company's assets, liabilities, and equity, which is expressed as Assets = Liabilities + Equity, is known as the:
A)Accounting equation.
B)Business equation.
C)Balance sheet.
D)Net income.
E)Liability equation.

Question

Quizplus · Accepted Answer

The accounting equation is the description of the relationship between a company's assets, liabilities, and equity. It is a fundamental principle of accounting and is used to ensure that the balance sheet of a company is accurate and reflects the financial position of the company at a specific point in time.

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