Which equality is the basis for the balance sheet?
A)Fixed Assets = Stockholder's Equity + Current Assets
B)Assets = Liabilities + Stockholder's Equity
C)Assets = Current Long-Term Debt + Retained Earnings
D)Fixed Assets = Liabilities + Stockholder's Equity
E)None of the above

Question

Quizplus · Accepted Answer

The equality Assets = Liabilities + Stockholder's Equity is known as the basic accounting equation and is the basis for the balance sheet. The balance sheet shows a company's assets (what it owns), liabilities (what it owes), and stockholder's equity (the value of the company owned by shareholders) at a specific point in time. This equation must always be in balance for the balance sheet to be accurate.

Which Equality Is the Basis for the Balance Sheet