Multiple choice

What is the accounting equation?

  1. Assets = Liabilities - Owner's Equity

  2. Assets = Liabilities + Owner's Equity

  3. Owner's Equity = Assets + Liabilities

  4. Owner's Equity= Assets - Liabilities

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

The fundamental accounting equation is Assets = Liabilities + Owner's Equity. This equation must always remain in balance.