Which of the following equations is correct?

Question

Quizplus · Accepted Answer

This equation is known as the accounting equation and represents the fundamental relationship between a company's assets, liabilities, and equity. The equation states that total assets must equal the sum of total liabilities and stockholders' equity. Option B is incorrect because dividing equity by liabilities cannot result in total assets. Option C is also incorrect because multiplying equity by liabilities cannot result in total assets. Option D is incorrect because subtracting liabilities from equity cannot result in total assets.

Which of the Following Equations Is Correct