Explain why liabilities are added to equity to determine assets

Liabilities are added to equity to determine assets because of the basic accounting equation which is Assets = Liabilities + Equity. This equation is the guidance in accounting records which must always be equal for each and every transaction. For every increase in asset, there should be a decrease in another asset or an increase in liabilities or equity for the same amount. On the other hand, for every decrease in an asset, there should be a related increase in another asset or a decrease in liabilities or equity. With this, the accounting equation would be maintained always as equal.