Accounting for IGCSE & O level - Final Statements (Section 5 - No. 47)

What is the relationship between assets, liabilities, and owner's equity?

Assets = Liabilities + Owner's Equity

Assets = Liabilities - Owner's Equity

Liabilities = Assets + Owner's Equity

Owner's Equity = Assets + Liabilities

This is the basic accounting equation that states that a company's assets are equal to the sum of its liabilities and owner's equity.