BACHELOR OF BUSINESS ADMINISTRATION

BUSINESS ADMINISTRATION

FINANCIAL ACCOUNTING

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
Correct form of Accounting Equation is?
A
Assets = Liabilities + Capital
B
Assets + Liabilities = Capital
C
Assets + Capital = Liabilities
D
Assets-Capital = Liabilities
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.

There is 1 question to complete.