Which equality is the basis for the statement of financial position?
A)Non-current Assets = Shareholder's Equity + Current Assets
B)Assets = Liabilities + Shareholder's Equity
C)Assets = Current Non-current liabilities + Retained Earnings
D)Non-current Assets = Liabilities + Shareholder's Equity
E)None of the above.

Question

Quizplus · Accepted Answer

The basis for the statement of financial position is the accounting equation which states that assets must equal liabilities plus shareholder's equity. This equation forms the foundation for the statement of financial position, which presents the company's financial position at a specific point in time by listing its assets, liabilities, and shareholder's equity. Choice B accurately represents the accounting equation and is the basis for the statement of financial position.

Which Equality Is the Basis for the Statement of Financial