Question

After a business transaction has been analyzed, which of the following must occur for the analysis to have been done correctly?

A. Equity must equal the difference between assets and liabilities.
B. Equity must be greater than the sum of assets and liabilities.
C. Equity must be greater than the difference between assets and liabilities.
D. Equity must equal the sum of assets and liabilities.​

Answer 1

A. Equity must equal the difference between assets and liabilities.

Step-by-step explanation:

Assets are things a company or business owns while liabilities are things person or company owes.

Thus, Equity is the difference between the assets and the liabilities.

So, option A which is Equity must equal the difference between assets and liabilities is the answer.