Which of the following is true for the accounting equation?

The correct answer is option 1- Assets = Liabilities + Capital.

Accounting equation signifies that the assets of a business are always equal to the total of its liabilities and capital (owner’s equity). The equation is as follows:
A = L + C Where, A = Assets, L = Liabilities, C = Capital.

Since, the accounting equation depicts the fundamental relationship among the components of the balance sheet, it is also called the Balance Sheet Equation.