The description of the relation between a company's assets,liabilities,and equity,which is expressed as Assets = Liabilities + Equity,is known as the:

A) Income statement equation.
B) Accounting equation.
C) Business equation.
D) Return on equity ratio.
E) Net income.

The equation Assets = Liabilities + Equity is known as the accounting equation and is the foundation of double-entry bookkeeping. It represents the relation between a company's assets, liabilities, and equity, and must always balance. The income statement equation (A) is Net Income = Revenue - Expenses, and measures a company's profitability over a specific period. The business equation (C) is not a commonly used term in accounting, and the return on equity ratio (D) is a financial ratio that measures a company's profitability relative to its shareholder equity. Net income (E) is the amount that remains after all expenses have been deducted from revenue during a specific period.