BUSINESS ADMINISTRATION
FINANCIAL ACCOUNTING
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Correct form of Accounting Equation is?
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Assets = Liabilities + Capital
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Assets + Liabilities = Capital
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Assets + Capital = Liabilities
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Assets-Capital = Liabilities
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Explanation:
Detailed explanation-1: -The correct form of accounting equation is Assets – Liabilities = Equity. It can also be written as Assets = Liabilities + Equity. This equation is also known as the balance sheet equation.
Detailed explanation-2: -Assets = Capital + Liabilities That is, through investment from the owners (capital) or by amounts owed to creditors (liabilities).
Detailed explanation-3: -Fundamentally, accounting comes down to a simple equation. Assets = Liabilities + Equity.
Detailed explanation-4: -Assets-Liabilities = Capital is correct. The Accounting Equation states that the Assets are always equal to the sum of Capital & Liabilities.
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