Q43
What is the basic accounting equation?
A.
Capital + Liabilities = assets
AnswerB.
Assets + Liabilities = Capital
C.
Capital + Assets = Liabilities
D.
Liabilities - Capital = Assets
Answer: Option A
Solution
Answer: Option A
Solution:
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.