Which of the following statements best represents the reason for the accounting equation?

Multiple choice question.

The total of everything owned by a business must always equal the total of what the business owes to creditors and owners.

The owners' rights are equal to the creditors' rights.

The equation may sometimes be out of balance at the end of a year.

The equation monitors the legal agreements made with creditors and what is owed to them at any point in time.