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

Name: The accounting equation will still balance if a $5,000 liability is misclassified as shareholders' equity. BT: Comprehension
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The accounting equation (Assets = Liabilities + Equity) will still balance because the total amount on the right side of the equation remains unchanged, even if the $5,000 is misclassified between liabilities and equity.

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