Final answer:
The correct expanded version of the accounting equation is (a) Assets = Liabilities + Equity, which is a fundamental financial principle that explains how a company's assets are financed through liabilities and owners' equity.
Step-by-step explanation:
The expanded version of the accounting equation displays the relationship between a company's assets, liabilities, and equity. This fundamental financial principle is pivotal for understanding how a business's balance sheet is structured. In its expanded form, the accounting equation can be expressed as Assets = Liabilities + Equity. From the information provided and commonly accepted accounting standards, the correct version of the expanded accounting equation would be (a) Assets = Liabilities + Equity. This equation showcases that a business's total assets are funded by borrowing money (liabilities) and by the company's owners (equity or net worth). For instance, on a bank's balance sheet, assets such as reserves, loans, and securities are counterbalanced by the liabilities (like deposits) and the net worth of the bank.