The accounting equation can be stated as which of the following?
A)Assets - liabilities = owners' equity
B)Assets + liabilities = owners' equity
C)Liabilities + assets = owners' equity
D)Owners' equity + assets = liabilities
E)Liabilities - owners' equity = assets

Question

Quizplus · Accepted Answer

The accounting equation, which forms the foundation of double-entry bookkeeping, is Assets = Liabilities + Owners' Equity. This equation shows that a company's assets are financed by debts (liabilities) and the money that was invested by owners or earned through operations (owners' equity). Option A, Assets - Liabilities = Owners' Equity, is a rearrangement of this fundamental equation, correctly representing the relationship between a company's assets, liabilities, and owners' equity.

The Accounting Equation Can Be Stated as Which of the Following