The accounting equation states that the economic resources of an entity are equal to the claims on those resources.

Name: The accounting equation states that the economic resources of an entity are equal to the claims on those resources.
Brand: Quizplus
Rating: 4.7 (47 reviews)

Question

Quizplus · Accepted Answer

The accounting equation, Assets = Liabilities + Equity, reflects that the economic resources owned by an entity (assets) are balanced by the claims against those resources, which are either claims by creditors (liabilities) or claims by owners (equity).

The Accounting Equation States That the Economic Resources of an Entity