The accounting identity is:
A) assets = liabilities and equity.
B) earnings before taxes - taxes = net income.
C) beginning shareholders' equity + net income - dividends = ending shareholders' equity.

Question

Quizplus · Accepted Answer

The accounting identity, also known as the accounting equation, is assets = liabilities + equity. This fundamental equation represents the relationship between a company's resources and the claims on those resources.

The Accounting Identity Is