Which of the following financial statements reports that total assets are equal to total liabilities plus total owner's equity?
A) Statement of owner's equity
B) Statement of cash flows
C) Income statement
D) Balance sheet

Question

Quizplus · Accepted Answer

The balance sheet is the financial statement that reports the equation: Total assets = Total liabilities + Total owner's equity. This equation is known as the accounting equation and is one of the fundamental principles of accounting. The statement of owner's equity shows the changes in owner's equity during a period of time, while the income statement reports the revenues and expenses for a specific period of time. The statement of cash flows reports the inflows and outflows of cash during a period of time.

Which of the Following Financial Statements Reports That Total Assets