Which equality is the basis for the balance sheet?
A) Fixed Assets = Stockholder's Equity + Current Assets
B) Assets = Liabilities + Stockholder's Equity
C) Assets = Current Long-Term Debt + Retained Earnings
D) Fixed Assets = Liabilities + Stockholder's Equity
E) None of these.

Question

Quizplus · Accepted Answer

The fundamental accounting equation states that assets must always equal the sum of liabilities and equity. This means that the balance sheet is based on this equality, as it shows a snapshot of a company's assets, liabilities, and equity at a specific point in time. Hence, option B is the correct answer.

Which Equality Is the Basis for the Balance Sheet