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 statement of financial position is also known as the balance sheet, and its fundamental principle is the accounting equation, which states that Assets = Liabilities + Shareholder's Equity. Therefore, option B is the correct choice as it represents the basic accounting equation on which the balance sheet is based.

Which Equality Is the Basis for the Statement of ﬁNancial