Multiple choice

Which of the following is the correct accounting equation?

  1. Assets = Liabilities + Capital

  2. Assets = Capital

  3. Capital = Liabilities

  4. Assets = Liabilities - Capital

  5. Liabilities + Assets = Capital

Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Accounting equation is based on the dual aspect concept (debit and credit). Every transaction has a two sided effect.