Question

Which of the following is an accurate depiction of the accounting equation?

1) Assets = Liabilities + Equity
2) Assets = Liabilities - Equity
3) Assets = Liabilities * Equity
4) Assets = Liabilities / Equity

Answer 1

The accurate depiction of the accounting equation is Assets = Liabilities + Equity.

Step-by-step explanation:

The accurate depiction of the accounting equation is:

1) Assets = Liabilities + Equity

The accounting equation represents the relationship between a company's assets, liabilities, and equity. Assets are the resources owned by the company, liabilities are the company's debts or obligations, and equity represents the owner's stake in the company.

For example, if a company has $100,000 in assets and $60,000 in liabilities, the equity would be $40,000 ($100,000 - $60,000), which is the owner's claim on the assets.