Assets = liabilities + owners' equity is the equation for information reported on the
A) checking balance.
B) balance sheet.
C) income statement.
D) earnings statement.
E) statement of owners' equity.

Question

Quizplus · Accepted Answer

The equation Assets = Liabilities + Owners' equity is the fundamental equation underlying the balance sheet, which is a financial statement that reports a company's assets, liabilities, and owners' equity at a particular point in time. Therefore, the correct answer is option B. The other options are incorrect because:

A) The checking balance only reports the current balance of a checking account and not the assets, liabilities, and owners' equity of a company.

C) The income statement reports a company's revenues and expenses over a period of time but does not report its assets, liabilities, and owners' equity.

D) The earnings statement is not a commonly used financial statement in accounting or finance.

E) The statement of owners' equity reports the changes in owners' equity over a period of time, but it does not report a company's assets and liabilities.

Assets = Liabilities + Owners' Equity Is the Equation for Information