Business FinancesQuestion 292 of 690
The fundamental accounting equation expressed on a balance sheet is:
a.Revenue − Expenses = Profit
b.Assets + Liabilities = Equity
c.Assets = Liabilities + Owner's Equity
d.Assets − Equity = Revenue
Explanation
The balance sheet always balances because Assets = Liabilities + Owner's Equity. Equity equals what remains for the owner after liabilities are subtracted from assets.
Practice all 690 questions free — no signup required.
Related questions on this topic
- Under the cash basis of accounting, a contractor records revenue when:
- Which accounting method records revenue when it is EARNED and expenses when they are INCURRED, even if no cash has changed hands?
- Which financial statement reports a contractor's revenue and expenses over a period of time and shows the net profit or loss?
- A contractor's balance sheet shows total assets of $400,000 and total liabilities of $250,000. What is the owner's equity?
- A contractor has current assets of $90,000 and current liabilities of $60,000. What is the working capital?
- A contractor completes a job with a contract price of $120,000 and total job costs of $90,000. What is the gross profit?
Last reviewed: · editorial process
PrepPass Editorial Team · Verified against California CSLB Contractor License Law & Business Exam · How we review