Under French accounting (Plan Comptable Général,
Under French accounting (Plan Comptable Général, PCG), what is the basic accounting equation?
A. Assets = Liabilities + Equity
B. Assets + Liabilities = Equity
C. Assets = Equity − Liabilities
D. Equity = Assets − Expenses
Answer: A
Explanation: The basic accounting equation is universal in double-entry bookkeeping, including French accounting (PCG). Assets are the resources owned by the company, while liabilities (debts) and equity (owner’s interest) are the sources of those resources. Thus, Assets must equal the sum of Liabilities and Equity.
