Final answer:
The algebraic expression assets = liabilities + owner's (or stockholders') equity refers to the balance sheet, a financial statement that represents a company's financial position, including a bank's financial position.
Step-by-step explanation:
The algebraic expression assets = liabilities + owner's (or stockholders') equity is known as the accounting equation and is the foundation for the balance sheet. The balance sheet is an essential financial statement that showcases a company's financial position at a specific point in time. It lists the company's assets, liabilities, and the owner's equity. Assets are resources of value that a person or company owns, such as cash or property. Liabilities represent debts or obligations that are owed, like loans or mortgages. The owner's equity (or stockholders' equity for a corporation) is the residual interest in the assets of the entity after deducting liabilities, which represents the net worth of the company. A bank's balance sheet reflects these principles, with bank capital representing its net worth.
For example, when a person uses cash to pay tuition, the cash is considered an asset. If a person owns a home, the home itself is an asset, while the mortgage on the home is a liability. The difference between total assets and total liabilities is the owner's equity, which in the context of a bank is referred to as bank capital. In the accounting structure known as a T-account, which separates assets and liabilities, the net worth is included on the liabilities side to balance the account.