Question

Which of the following best expresses the accounting equation?

• A. Assets = Liabilities + Owner’s Equity
• B. Assets = Liabilities - Owner’s Equity
• C. Assets = Owner’s Equity - Liabilities
• D. Assets = Liabilities × Owner’s Equity

Answer 1

Answer:

A. Assets = Liabilities + Owner’s Equity

Capital

• Cash or assets invested by the owner into the business is known as capital.

• Capital is an obligation of the business to the owner.

• It is the owner's claim on the assets of the business.

• Capital is also known as owner's equity.

• Capital= Assets- Liabilities