The balance sheet depicts which of the following equations?
A)Net income = revenue - expenses.
B)Ending retained earnings = beginning retained earnings + net income - dividends.
C)Assets = liabilities + stockholders' equity.

Question

Quizplus · Accepted Answer

The balance sheet is based on the accounting equation, which states that assets must equal liabilities plus stockholders' equity. Therefore, the correct answer is (C) Assets = liabilities + stockholders' equity. Option A is incorrect because it represents the income statement equation, and Option B represents the retained earnings statement equation.

The Balance Sheet Depicts Which of the Following Equations