Which of the following is the correct accounting equation?
A)Assets = Liabilities + Owner's Equity
B)Assets + Owner's Equity = Liabilities
C)Assets = Liabilities - Owner's Equity
D)Assets + Liabilities = Owner's Equity

Question

Quizplus · Accepted Answer

The accounting equation states that Assets are equal to Liabilities plus Owner's Equity. This equation must always hold true in order for the company's financial statements to be accurate. Option B is incorrect as Owner's Equity should be added to Liabilities, not vice versa. Option C is incorrect as Owner's Equity should be added to Liabilities, not subtracted. Option D is incorrect as Assets plus Liabilities do not equal Owner's Equity.

Which of the Following Is the Correct Accounting Equation