What formula represents total assets on the balance sheet?

Total assets on the balance sheet are represented by the sum of current assets and non-current assets. This formula captures all the resources that a company owns and uses in its operations, which are crucial for generating revenue.

Current assets include cash, inventory, accounts receivable, and other assets that are expected to be converted into cash or consumed within a year. Non-current assets, also known as long-term assets, consist of property, plant, equipment, and intangible assets that provide value over a longer period, usually more than one year. By combining these two categories, you get a complete picture of the organization’s resources that are available for use.

This understanding reflects the accounting equation, which states that assets equal liabilities plus equity. Therefore, knowing the total assets allows stakeholders to assess the financial health of the organization. The other choices do not correctly define total assets, either by mixing liabilities with assets or by including only certain asset types without achieving a comprehensive view.