Which of the following is a basic accounting equation:

Q Which of the following is a basic accounting equation:

Question ID

#24248

Subchapter

Elements of Accounting

Action

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Correct Answer: C

The correct answer is:

C. Assets = Liabilities + Owner’s Equity ✅

👉 Explanation:

This is the fundamental accounting equation, which forms the foundation of double-entry bookkeeping.
It shows that everything a business owns (Assets) is financed either by:
- Liabilities (borrowed funds) or
- Owner’s Equity (owner’s investment).
Other options are either incorrect formulas or relate to profit calculations, not the basic accounting structure.

💡 Remember: Assets always equal the sum of Liabilities and Equity — it keeps the books balanced.