Assets-Liabilities=____________?
Correct answer: B. Equity
- A. Cash
- B. Equity
- C. Net income
- D. Net expenses
Explanation
The accounting equation is Assets = Liabilities + Equity, so rearranging it gives Assets − Liabilities = Equity. Equity represents the owner's residual interest in the business.
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About Accounting Principles
Accounting principles explain the rules used to record, classify and report business transactions. Coverage includes the accounting equation, double-entry system, accrual and cash bases, matching and prudence concepts, consistency, going concern, business entity, and the difference between capital and revenue items.
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