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Total assets equal the sum of total liabilities and equity

Explain total assets equal the sum of total liabilities and equity.

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Equity + Liabilities= Assets


Assets are the valuable items which a business owns. Liability is the claim on a business by non-owners and equity is defined as the owner’s claim on the business. The liabilities and equity’s sum is the total capital added to the business and by definition it is equal to the total value of the assets.

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