PRC-1 · Chapter 1 · Question 64 of 100
Which of the following correctly represents a valid rearrangement of the fundamental accounting equation?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) Capital = Assets - Liabilities
Explanation
The basic accounting equation is Assets = Liabilities + Capital. By rearranging it algebraically, Capital (Equity) equals Assets minus Liabilities.
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