The accounting equation will still balance if a $5,000 liability is misclassified as shareholders' equity.

Name: The accounting equation will still balance if a $5,000 liability is misclassified as shareholders' equity.
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The accounting equation (Assets = Liabilities + Shareholders' Equity) will still balance because the misclassification affects only the components of the right side of the equation, not the total amount.

The Accounting Equation Will Still Balance If a $5,000 Liability