Find out the value of assets if: Liabilities=$5000 and Capital=$1000
Correct answer: B. $6000
- A. $4000
- B. $6000
- C. $7000
- D. $3000
Explanation
Using Assets = Liabilities + Capital, assets equal $5,000 + $1,000 = $6,000. Therefore, option b follows directly from the basic accounting equation.
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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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