The balance sheet is organized to reflect the accounting equation. What is the accounting equation?
A) Owners' Equity = Liabilities + Assets
B) Assets = Liabilities + Owners' Equity
C) Liabilities = Assets + Owners' Equity
D) Assets - Liabilities = Assets + Owners' Equity

Question

Quizplus · Accepted Answer

The accounting equation is Assets = Liabilities + Owners' Equity. This means that the total assets of a company must be equal to the total of its liabilities and owner's equity. The balance sheet is organized to reflect this equation, with assets listed on one side and liabilities and owner's equity listed on the other side.

The Balance Sheet Is Organized to Reflect the Accounting Equation