The equation best describing the balance sheet is:
A)Assets = Liabilities + Stockholders' Equity.
B)Revenues
Expenses = Net Income.
C)Ending Retained Earnings + Dividends = Net Income.
D)Revenues + Expenses = Net Income.

Question

Quizplus · Accepted Answer

The equation Assets = Liabilities + Stockholders' Equity is known as the accounting equation and represents the fundamental relationship in a balance sheet. It states that the total assets of a company must be equal to the sum of its liabilities and stockholders' equity. The other options provided are either incorrect or represent the income statement equation, rather than the balance sheet equation.

The Equation Best Describing the Balance Sheet Is