JAMB Accounts Principles of Accounts 2023 Paper

Concept:The accounting equation is the foundation of the double-entry system and shows the relationship between assets, liabilities, and capital.Explanation:The basic accounting equation is:$\text{Assets} = \text{Liabilities} + \text{Owner's Equity}$Owner's equity is also called capital.From the same equation, the claims or sources of assets can be written as:$\text{Liabilities} + \text{Equity} = \text{Assets}$This is why every debit has a corresponding credit: the books must always keep this equation balanced.Answer:The correct statement is $\text{Liabilities} + \text{Equity} = \text{Assets}$, which is Option C.