[amp_mcq option1=”Capital = Assets + Liabilities” option2=”Capital = Assets – Liabilities” option3=”Assest = Liabilities – Capital” option4=”Liabilities = Assets + Capital” correct=”option1″]<\/p>\n
The correct answer is: A. Capital = Assets + Liabilities<\/p>\n
The accounting equation is a basic formula that describes the relationship between assets, liabilities, and equity. It states that the total assets of a company must equal the total liabilities plus the total equity.<\/p>\n
Assets are the resources that a company owns and expects to benefit from in the future. Liabilities are the obligations that a company owes to others. Equity is the ownership interest in a company.<\/p>\n
The accounting equation can be expressed in a variety of ways, but the most common is:<\/p>\n
Assets = Liabilities + Equity<\/p>\n
This equation can be rearranged to show the relationship between each of the three components:<\/p>\n
Assets = Liabilities + Equity<\/p>\n
Assets = Equity + Liabilities<\/p>\n
Equity = Assets – Liabilities<\/p>\n
Liabilities = Assets – Equity<\/p>\n
The accounting equation is a fundamental concept in accounting and is used to prepare financial statements. It is important to understand the accounting equation in order to understand financial statements and to make sound financial decisions.<\/p>\n
Here is a brief explanation of each option:<\/p>\n
[amp_mcq option1=”Capital = Assets + Liabilities” option2=”Capital = Assets – Liabilities” option3=”Assest = Liabilities – Capital” option4=”Liabilities = Assets + Capital” correct=”option1″]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[85],"tags":[],"class_list":["post-43933","post","type-post","status-publish","format-standard","hentry","category-accounting","no-featured-image-padding"],"yoast_head":"\n