If a fraudster wants to conceal the removal of a liability from the books, which action will NOT balance the accounting equation?

When considering how to balance the accounting equation, which is structured as Assets = Liabilities + Owners' Equity, it's important to understand how different actions will affect this balance. The goal of the fraudster in concealing the removal of a liability is to manipulate the equation without drawing attention to the fact that a liability has been eliminated.

Increasing a different liability is a way to offset the removal of one liability, keeping the overall equation in balance. Similarly, increasing revenue or increasing owners' equity also positively contributes to balancing the equation because they directly increase the net worth, maintaining equilibrium between the three components.

However, increasing an asset does not balance the equation when a liability is removed. In the context of the equation, if a liability is removed and an asset is increased, there would be an imbalance since the assets would increase while the liabilities fail to adjust in response. Thus, this choice does not maintain the integrity of the accounting equation, which would be crucial for a fraudster aiming to conceal fraudulent activities. Therefore, this makes increasing an asset the incorrect action that fails to keep the accounting equation balanced.