Which one of the following expressions correctly represents the fundamental accounting equation?

• A. Assets + Liabilities = Equity
• B. Assets = Liabilities - Equity
• C. Assets = Liabilities + Equity
• D. Assets - Liabilities = Revenue

Answer: (C)

Verified step by step guidance

1. Step 1: Understand the fundamental accounting equation, which is the foundation of financial accounting. It represents the relationship between a company's assets, liabilities, and equity.
2. Step 2: Recall the correct formula for the fundamental accounting equation: \( \text{Assets} = \text{Liabilities} + \text{Equity} \). This equation ensures that a company's financial position is balanced.
3. Step 3: Analyze the options provided in the problem. Compare each expression to the correct fundamental accounting equation to determine which one matches.
4. Step 4: Eliminate incorrect options by checking whether they align with the principle that assets are funded by liabilities and equity. For example, \( \text{Assets} + \text{Liabilities} = \text{Equity} \) is incorrect because it does not balance the equation properly.
5. Step 5: Confirm that the correct answer is \( \text{Assets} = \text{Liabilities} + \text{Equity} \), as this equation accurately represents the relationship between these financial elements.