Sure! Let's go step-by-step to analyze which statement is incorrect:
Firstly, we need to understand the fundamental accounting equation, which is:
[tex]\[ \text{Assets} = \text{Liabilities} + \text{Equity} \][/tex]
Let’s now evaluate each given statement in the context of this fundamental equation:
### Statement A: [tex]\(\text{Assets} = \text{Liabilities} + \text{Equity}\)[/tex]
This statement is essentially the fundamental accounting equation itself. Therefore, it is correct.
### Statement B: [tex]\(\text{Equity} = \text{Assets} - \text{Liabilities}\)[/tex]
If we rearrange the fundamental accounting equation:
[tex]\[ \text{Assets} = \text{Liabilities} + \text{Equity} \][/tex]
Subtracting [tex]\(\text{Liabilities}\)[/tex] from both sides gives us:
[tex]\[ \text{Equity} = \text{Assets} - \text{Liabilities} \][/tex]
Therefore, this statement is correct as well.
### Statement C: [tex]\(\text{Equity} - \text{Liabilities} = \text{Assets}\)[/tex]
Now consider this equation. If we start from the equation:
[tex]\[ \text{Equity} = \text{Assets} - \text{Liabilities} \][/tex]
and try to rearrange it to match statement C, we get:
[tex]\[ \text{Equity} - \text{Liabilities} \neq \text{Assets} \][/tex]
This does not hold true because it contradicts the fundamental equation. Therefore, statement C is not correct.
### Statement D: [tex]\(\text{Liabilities} = \text{Assets} - \text{Equity}\)[/tex]
Starting from the fundamental accounting equation:
[tex]\[ \text{Assets} = \text{Liabilities} + \text{Equity} \][/tex]
Subtracting [tex]\(\text{Equity}\)[/tex] from both sides gives us:
[tex]\[ \text{Liabilities} = \text{Assets} - \text{Equity} \][/tex]
Thus, this statement is correct.
After the analysis, we can conclude that statement C is incorrect.
