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Fundamentals of Accounting
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Which of the following is correct?
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A
All of them
💡 Explanation:
All three equations are mathematically equivalent to the fundamental accounting equation: Assets = Liabilities + Capital. Option A shows the standard form, Option B (Capital = Assets - Liabilities) rearranges to show what owners claim after paying debts, and Option C (Liabilities = Assets - Capital) shows what must be paid to outsiders after accounting for owner's equity. All are correct representations of the same relationship.