Given Assets total 6,000 and Liabilities 1,000 and Equity 5,000, which statement is true?

Given Assets total 6,000 and Liabilities 1,000 and Equity 5,000, which statement is true?

• A. Assets equal Liabilities plus Equity
• B. Assets exceed Liabilities
• C. Liabilities exceed Assets
• D. Equity exceeds Assets

Answer: (A)

The accounting equation is in play: Assets must equal Liabilities plus Equity. With these numbers, Liabilities plus Equity is 1,000 + 5,000 = 6,000, which matches Assets. So the statement that assets equal liabilities plus equity is true and precisely reflects the balance on the books. While it’s also true that assets exceed liabilities here, the defining relationship shown is the equality A = L + E, which is why this statement is the best answer. The other options would require relationships that aren’t supported by the numbers (liabilities exceeding assets, or equity exceeding assets).

The accounting equation is in play: Assets must equal Liabilities plus Equity. With these numbers, Liabilities plus Equity is 1,000 + 5,000 = 6,000, which matches Assets. So the statement that assets equal liabilities plus equity is true and precisely reflects the balance on the books. While it’s also true that assets exceed liabilities here, the defining relationship shown is the equality A = L + E, which is why this statement is the best answer. The other options would require relationships that aren’t supported by the numbers (liabilities exceeding assets, or equity exceeding assets).