If a business owns property outright and it is listed as a fixed asset, why would the total assets = total equity and liabilities? Is it because the property is classed as equity?
No, because buying the property would require the bank balance to shrink (the bank is an asset), so you're simply reducing one asset and increasing another, or the money is paid with the owner's investment funds, which are equity. I hope this helps.
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If a business owns property outright and it is listed as a fixed asset, why would the total assets = total equity and liabilities? Is it because the property is classed as equity?
No, because buying the property would require the bank balance to shrink (the bank is an asset), so you're simply reducing one asset and increasing another, or the money is paid with the owner's investment funds, which are equity. I hope this helps.