What is the basic accounting equation?
Correct answer: A. Capital+Liabilities=Assets
- A. Capital+Liabilities=Assets
- B. Assets+ liabilities =Capital
- C. Capital+assets=liabilities
- D. Liabilities+Capital Compare Credit Cards
Explanation
The accounting equation is Assets = Capital + Liabilities, showing that business resources are financed by the owner and outsiders. Rearranged, this is Capital + Liabilities = Assets.
Report an error
The more specific you are, the faster it gets fixed. A source beats an opinion.
Prefer email? support@testustad.com
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.
Practise Accounting Principles
351 free Accounting Principles MCQs from Accounting, each with the correct answer and an explanation. Unlimited attempts, no account needed.
Exams that ask Accounting questions like this
Accounting is on 3 papers prepared for on TestUstad, and all of them draw the same bank, so this question is worth knowing for every one of them.
More Accounting Principles questions
Which of the following is a liability?
What is equity?
Identify the asset from the following:
Which is the most important characteristic that all assets of a business have?
Liability are arisen from which of the following events?
An asset must be _______ by the business to be shown as an asset in its "balance sheet"