What is the basic accounting equation?
A. Capital + Liabilities = assets
B. Assets + Liabilities = Capital
C. Capital + Assets = Liabilities
D. Liabilities - Capital = Assets
Answer: Option A
Solution(By Examveda Team)
Capital + Liabilities = assets is the basic accounting equation. The fundamental accounting equation, also called the balance sheet equation, represents the relationship between the assets, liabilities, and owner's equity of a person or business. It is the foundation for the double-entry bookkeeping system.Join The Discussion
Comments ( 1 )
Accounting provides information on
A. Cost and income for managers
B. Company's tax liability for a particular year
C. Financial conditions of an institutions
D. All of the above
The long term assets that have no physical existence but are rights that have value is known as
A. Current assets
B. Fixed assets
C. Intangible assets
D. Investments
The assets that can be converted into cash within a short period (i.e. 1 year or less) are known as
A. Current assets
B. Fixed assets
C. Intangible assets
D. Investments
Patents, Copyrights and Trademarks are
A. Current assets
B. Fixed assets
C. Intangible assets
D. Investments
Assets =Liabilities + Owner’s Equity.
It is usual to place liabilities before the owner’s equity in the accounting equation because creditors have first rights to the assets.