{"id":43933,"date":"2024-04-15T21:36:31","date_gmt":"2024-04-15T21:36:31","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=43933"},"modified":"2024-04-15T21:36:31","modified_gmt":"2024-04-15T21:36:31","slug":"which-of-the-following-is-accounting-equation","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/which-of-the-following-is-accounting-equation\/","title":{"rendered":"Which of the following is accounting equation:"},"content":{"rendered":"<p>\r\n    <!-- Check if it's an AMP page -->\r\n            <!-- Non-AMP version -->\r\n        <div class=\"mcq-container\" data-quiz-id=\"quizState_6a9731b64dbf1\">\r\n                                            <div class=\"option\" data-option-key=\"option1\" data-is-correct=\"true\">\r\n                    Capital = Assets + Liabilities                <\/div>\r\n                                            <div class=\"option\" data-option-key=\"option2\" data-is-correct=\"false\">\r\n                    Capital = Assets - Liabilities                <\/div>\r\n                                            <div class=\"option\" data-option-key=\"option3\" data-is-correct=\"false\">\r\n                    Assest = Liabilities - Capital                <\/div>\r\n                                            <div class=\"option\" data-option-key=\"option4\" data-is-correct=\"false\">\r\n                    Liabilities = Assets + Capital                <\/div>\r\n                            \r\n            <!-- Feedback messages for non-AMP -->\r\n            <div class=\"feedback\" data-feedback=\"wrong\">Answer is Right!<\/div>\r\n            <div class=\"feedback\" data-feedback=\"right\">Answer is Wrong!<\/div>\r\n        <\/div>\r\n\r\n        <script>\r\n        document.addEventListener('DOMContentLoaded', function () {\r\n            var containers = document.querySelectorAll('.mcq-container');\r\n\r\n            containers.forEach(function(container) {\r\n                var options = container.querySelectorAll('.option');\r\n                var feedbackSelect = container.querySelector('[data-feedback=\"select\"]');\r\n                var feedbackWrong = container.querySelector('[data-feedback=\"wrong\"]');\r\n                var feedbackRight = container.querySelector('[data-feedback=\"right\"]');\r\n\r\n                options.forEach(function(option) {\r\n                    option.addEventListener('click', function() {\r\n                        var selectedOption = option.getAttribute('data-option-key');\r\n                        var isCorrect = option.getAttribute('data-is-correct') === 'true';\r\n\r\n                        \/\/ Remove previous selections\r\n                        options.forEach(function(opt) {\r\n                            opt.classList.remove('correct', 'incorrect');\r\n                        });\r\n\r\n                        \/\/ Add the correct\/incorrect class\r\n                        if (isCorrect) {\r\n                            option.classList.add('correct');\r\n                            feedbackRight.hidden = false;\r\n                            feedbackWrong.hidden = true;\r\n                        } else {\r\n                            option.classList.add('incorrect');\r\n                            feedbackRight.hidden = true;\r\n                            feedbackWrong.hidden = false;\r\n                        }\r\n\r\n                        \/\/ Hide select feedback\r\n                        feedbackSelect.hidden = true;\r\n                    });\r\n                });\r\n            });\r\n        });\r\n        <\/script>\r\n    \r\n    <!--more--><\/p>\n<p>The correct answer is: A. Capital = Assets + Liabilities<\/p>\n<p>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<p>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<p>The accounting equation can be expressed in a variety of ways, but the most common is:<\/p>\n<p>Assets = Liabilities + Equity<\/p>\n<p>This equation can be rearranged <div class=\"youtube-subscribe-container\">\r\n        <a href=\"https:\/\/www.youtube.com\/channel\/UCNHT8lW-JmLC68rjBfZhdkg?sub_confirmation=1\" target=\"_blank\" class=\"youtube-subscribe-button\">\r\n            <span class=\"youtube-icon\">\r\n                <svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 576 512\">\r\n                    <path d=\"M549.7 124.1c-6.3-23.7-24.8-42.3-48.3-48.6C458.8 64 288 64 288 64S117.2 64 74.6 75.5c-23.5 6.3-42 24.9-48.3 48.6-11.4 42.9-11.4 132.3-11.4 132.3s0 89.4 11.4 132.3c6.3 23.7 24.8 41.5 48.3 47.8C117.2 448 288 448 288 448s170.8 0 213.4-11.5c23.5-6.3 42-24.2 48.3-47.8 11.4-42.9 11.4-132.3 11.4-132.3s0-89.4-11.4-132.3zm-317.5 213.5V175.2l142.7 81.2-142.7 81.2z\"\/>\r\n                <\/svg>\r\n            <\/span>\r\n            Subscribe on YouTube\r\n        <\/a>\r\n    <\/div> to show the relationship between each of the three components:<\/p>\n<p>Assets = Liabilities + Equity<\/p>\n<p>Assets = Equity + Liabilities<\/p>\n<p>Equity = Assets &#8211; Liabilities<\/p>\n<p>Liabilities = Assets &#8211; Equity<\/p>\n<p>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<p>Here is a brief explanation of each option:<\/p>\n<ul>\n<li>Option A: Capital = Assets + Liabilities. This is the correct answer. The accounting equation states that the total assets of a company must equal the total liabilities plus the total equity.<\/li>\n<li>Option B: Capital = Assets &#8211; Liabilities. This is incorrect. The accounting equation states that the total assets of a company <div class=\"telegram-channel-container\">\r\n        <a href=\"https:\/\/t.me\/pscnotes2025\" target=\"_blank\" class=\"telegram-channel-button\">\r\n            <span class=\"telegram-icon\">\r\n                <svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 496 512\">\r\n                    <path fill=\"white\" d=\"M248,8C111,8,0,119,0,256s111,248,248,248s248-111,248-248S385,8,248,8z M362,177L320,367c-3,14-10,18-20,14l-56-41l-27,26 c-3,3-5,5-10,5l4-63L323,196c5-5-1-7-8-3l-98,62l-42-13c-9-3-10-9,2-14l162-63C351,160,365,164,362,177z\"\/>\r\n                <\/svg>\r\n            <\/span>\r\n            Join Our Telegram Channel\r\n        <\/a>\r\n    <\/div> must equal the total liabilities plus the total equity. In this option, the total assets are equal to the total liabilities, but the total equity is missing.<\/li>\n<li>Option C: Assets = Liabilities &#8211; Capital. This is incorrect. The accounting equation states that the total assets of a company must equal the total liabilities plus the total equity. In this option, the total assets are equal to the total liabilities, but the total equity is negative.<\/li>\n<li>Option D: Liabilities = Assets + Capital. This is incorrect. The accounting equation states that the total assets of a company must equal the total liabilities plus the total equity. In this option, the total liabilities are equal to the total assets plus the total equity. This is not possible, as the total liabilities cannot be greater than the total assets.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Join Our Telegram Channel Subscribe on YouTube<\/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":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.2 (Yoast SEO v23.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Which of the following is accounting equation:<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/exam.pscnotes.com\/mcq\/which-of-the-following-is-accounting-equation\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" 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