Question

The _______ report proves the fundamental accounting equation: Assets = Liabilities + Equity.

a) Balance Sheet
b) Income Statement
c) Cash Flow Statement
d) Trial Balance

Answer 1

The correct answer is a) Balance Sheet. A balance sheet is a financial statement that lists a company's assets, liabilities, and equity. The fundamental accounting equation, Assets = Liabilities + Equity, is proven by the balance sheet.

Step-by-step explanation:

The correct answer is a) Balance Sheet.

A balance sheet is a financial statement that provides a snapshot of a company's financial position at a specific point in time. It lists the company's assets, liabilities, and equity. The fundamental accounting equation, Assets = Liabilities + Equity, is proven by the balance sheet, as it shows that the total value of a company's assets is equal to the combination of its liabilities and equity.