The Basic Accounting Equation Is

question 48

Multiple Choice

The basic accounting equation is:

• A) Assets = Revenues - Expenses.
• B) Assets = Liabilities - Owner's Equity.
• C) Profit = Revenues - Expenses.
• D) Assets = Liabilities + Owner's Equity.

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Definitions:

Budgeted Item

An expense or income that has been planned for and included in a budget.

Traded Asset

An asset that is bought and sold in financial markets, such as stocks, bonds, commodities, or currencies.

Capital Expenditure

Capital invested by an enterprise in procuring or upgrading solid assets such as land, manufacturing facilities, or hardware.

Equity Account

An account representing the owner's interest in the company, calculated as total assets minus total liabilities.