The accounting equation can be written as _______ = Liabilities + Equity.

The accounting equation can be written as _______ = Liabilities + Equity.

• A. Liabilities
• B. Assets
• C. Equity
• D. Revenue

Answer: (B)

Assets are what the company owns or controls that have value. In double-entry accounting, every asset is financed either by liabilities (what the company owes) or by equity (the owner's claim). This relationship keeps the books balanced: assets = liabilities + equity. So the blank should be filled with Assets. Revenue isn’t listed as a standalone balance-sheet item; it affects equity through net income and retained earnings, but belongs on the income statement and then into equity, not on the left side of this equation.

Assets are what the company owns or controls that have value. In double-entry accounting, every asset is financed either by liabilities (what the company owes) or by equity (the owner's claim). This relationship keeps the books balanced: assets = liabilities + equity. So the blank should be filled with Assets. Revenue isn’t listed as a standalone balance-sheet item; it affects equity through net income and retained earnings, but belongs on the income statement and then into equity, not on the left side of this equation.