BUSINESS ADMINISTRATION
FINANCIAL ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Assets
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Revenues
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Liabilities
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Owner’s Equity
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Detailed explanation-1: -Basic accounting equation is Assets= Capital + Liabilities, hence Revenues is not a part of the basic accounting equation.
Detailed explanation-2: -The three elements of the accounting equation are assets, liabilities, and shareholders’ equity. The formula is straightforward: A company’s total assets are equal to its liabilities plus its shareholders’ equity.
Detailed explanation-3: -The answer for this question is Revenue. therefore we know that the answer is revenue. To Know more: Which of these is not included as a separate item in the basic accounting equation? Assets revenues liabilities stockholders equity.
Detailed explanation-4: -Revenue < Expense → Net Loss → Owner’s Equity decrease 3. From the accounting equation, the revenue derived from the transactions will lead to an increase in assets, or the reduction of liabilities.
Detailed explanation-5: -Accounting Equation is : Assets-Liabilities = Capital. So the right answer would be ‘B’, Where Trial Balance is not an element of Accounting Equation.