Which of the following equations is correct?
A) Assets plus Liabilities = Equity.
B) Assets = Liabilities minus Equity.
C) Liabilities = Assets plus Equity.
D) Equity = Assets minus Liabilities.

Question

Quizplus · Accepted Answer

The correct equation is Equity = Assets minus Liabilities. This is the basic accounting equation that states that the total value of assets must equal the sum of liabilities and equity. Rearranging the equation, we get Equity = Assets minus Liabilities.

Which of the Following Equations Is Correct