Multiple choice

Asset minus liabilities is

  1. Drawing

  2. Capital

  3. Credit

  4. Expenses
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The accounting equation is Assets = Capital + Liabilities. Rearranging this gives Capital = Assets - Liabilities. Capital represents the owner's equity or net worth of the business. Drawings, credit, and expenses are distinct accounting concepts.

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