Balance Sheet is based upon which of the following formula?
Correct answer: D. Assets = Liabilities + Stockholder's equity
- A. Assets = Liabilities - Stockholder's equity
- B. Assets + Liabilities = Stockholder's equity
- C. Assets + Stockholder's equity = Liabilities
- D. Assets = Liabilities + Stockholder's equity
Explanation
The accounting equation must balance as Assets = Liabilities + Stockholders' Equity. It shows that assets are financed either by creditors or by the owners.
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Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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