The correct answer is D. Assets + Capital = Liabilities.
The accounting equation is a fundamental concept in accounting that states that the total assets of a company must equal the total liabilities and equity of the company. This equation can be expressed as follows:
Assets = Liabilities + Equity
Assets are the resources that a company owns, such as cash, inventory, and equipment. Liabilities are the debts that a company owes, such as accounts payable and long-term debt. Equity is the ownership interest in a company, which is represented by the common stock and retained earnings accounts.
The accounting equation is a useful tool for analyzing a company’s financial condition. By comparing the assets, liabilities, and equity of a company, it is possible to determine the company’s financial health and its ability to meet its obligations.
The other options are incorrect because they do not represent the correct accounting equation. Option A is incorrect because it subtracts liabilities from assets. Option B is incorrect because it adds liabilities to assets. Option C is incorrect because it subtracts assets from liabilities.
I hope this explanation is helpful. Please let me know if you have any other questions.