The correct answer is A. Assets = Liabilities + Capital.
A balance sheet is a financial statement that reports a company’s assets, liabilities, and equity at a specific point in time. The assets of a company are the resources that the company owns and expects to benefit from in the future. The liabilities of a company are the obligations that the company owes to others. The equity of a company is the difference between the assets and liabilities of the company.
The equation Assets = Liabilities + Capital is known as the accounting equation. It is a fundamental principle of accounting that must be true for every company. The accounting equation can be used to calculate the missing value in a balance sheet. For example, if a company has assets of $100,000 and liabilities of $50,000, then the company’s equity must be $50,000.
The other options are incorrect because they do not represent the accounting equation. Option B, Liabilities = Assets + Capital, is the opposite of the accounting equation. Option C, Capital = Assets + Liabilities, is also incorrect because it does not include the liabilities of the company. Option D, All of these, is incorrect because only option A is true.