Why are the assets of the business are always equals to the capital plus liabilities?

The equation "Assets = Capital + Liabilities" reflects the fundamental accounting principle known as the accounting equation. It shows that a business's resources (assets) are financed either by the owner's equity (capital) or by borrowing (liabilities). This balance ensures that all financial activities are accurately represented, maintaining the integrity of financial statements. Essentially, every asset must have a source of funding, whether from the owner's investment or external debts.