Business FinancesQuestion 1139 of 1632
The fundamental accounting equation is:
a.Owner's Equity = Assets + Liabilities
b.Assets = Revenue - Expenses
c.Assets = Liabilities + Owner's Equity
d.Revenue = Assets + Liabilities
Explanation
Assets = Liabilities + Owner's Equity is the foundation of the balance sheet. Everything the company owns is financed either by what it owes (liabilities) or by the owner's investment and retained earnings (equity).
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Related questions on this topic
- The current ratio is calculated as:
- A contractor has current assets of $200,000 and current liabilities of $80,000. What is his current ratio?
- Which financial statement reports a company's assets, liabilities, and owner's equity at a single point in time?
- A contractor's balance sheet shows total assets of $500,000 and total liabilities of $320,000. What is the owner's equity?
- Which statement summarizes revenues and expenses over a PERIOD of time to show profit or loss?
- A quick ratio (acid-test) differs from the current ratio because the quick ratio:
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