BUSINESS ADMINISTRATION
FINANCIAL ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Assets = Liabilities + Equity
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Assets = Liabilities-Equity
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Equity = Liabilities + Assets
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Liabilities = Equity + Assets
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Detailed explanation-1: -The main accounting equation is: Assets = Liabilities + Equity. Together, they make up a company’s balance sheet. The concept behind it is that everything the business has came from somewhere-either a third party, such as a lender, or an owner, such as a stockholder.
Detailed explanation-2: -The accounting equation is a formula that shows the sum of a company’s liabilities and shareholders’ equity are equal to its total assets (Assets = Liabilities + Equity). The clear-cut relationship between a company’s liabilities, assets and equity are the backbone to double-entry bookkeeping.
Detailed explanation-3: -Equity = Assets – Liabilities You can typically locate these figures at the bottom of your balance sheet. By understanding the accounting formula and its role within your business, you can better monitor your businesses’ financial stability.
Detailed explanation-4: -Also known as the balance sheet equation, the accounting equation formula is Assets = Liabilities + Equity. This equation should be supported by the information on a company’s balance sheet.