The Formula for the Basic Accounting Equation Is

question 35

Multiple Choice

The formula for the basic accounting equation is

• A)OWNER'S EQUITY = TOTAL ASSETS + TOTAL LIABILITIES.
• B)OWNER'S EQUITY = TOTAL LIABILITIES - TOTAL ASSETS.
• C)TOTAL ASSETS = TOTAL LIABILITIES - OWNER'S EQUITY.
• D)TOTAL ASSETS = TOTAL LIABILITIES + OWNER'S EQUITY.
• E)TOTAL LIABILITIES = TOTAL ASSETS + OWNER'S EQUITY.

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Definitions:

Adequate Capital

Sufficient funds required by a business to finance its operations and meet its obligations without facing financial distress.

Bank Run

A situation where a large number of a bank's customers try to withdraw their deposits simultaneously because they believe the bank might fail.

Canadian Deposit Insurance Corporation (CDIC)

A federal crown corporation in Canada that provides deposit insurance to protect the deposits made by consumers in member financial institutions in case of their failure.

Bond Indenture

A legal and binding agreement between the bond issuer and the bondholders that specifies the terms of the bond, including the repayment schedule, interest rate, and the duties and responsibilities of both parties.