In the balance sheet equation, what do assets equal?

In the balance sheet equation, assets are expressed as the sum of liabilities and equity. This fundamental accounting principle reflects that everything the company owns (assets) is financed either by borrowing (liabilities) or through the contributions of its owners (equity).

This equation is known as the accounting equation: Assets = Liabilities + Equity. It ensures that the balance sheet remains balanced, showing that a company's resources (assets) are equal to the claims against those resources (liabilities and equity).

The other options do not accurately represent this relationship. Subtracting liabilities from equity does not provide a meaningful representation of assets; rather, it distorts the relationship. Combining debts with cash does not encompass all assets, which may include inventory, property, and other forms of assets. Similarly, liabilities plus expenses do not equate to assets since expenses are not a component of the balance sheet but rather part of the income statement. Thus, the correct answer highlights the foundational concept of how assets are financed within a company, confirming the integrity of financial reporting.