Which statement about the balance sheet is true?

In the context of a balance sheet, the statement that is true refers to the fundamental accounting equation, which is that a company's assets must equal the sum of its liabilities and equity. This principle is the foundation of double-entry accounting and reflects the idea that what a company owns (assets) is financed by what it owes (liabilities) and the owners' claims (equity).

The interpretation of options suggests that not all presented statements are valid. While it is accurate that a balance sheet must balance, it is critical to clarify that the relationship is between assets, liabilities, and equity, not simply stating that assets must equal liabilities alone; therefore, only the relationship mentioned in the correct statement captures this essential accounting principle accurately.

In summary, assets must equal the total of liabilities and equity, which reinforces the necessity for a balanced approach and highlights why this accounting equation is so vital in maintaining accurate financial records.