Which of the Following Is True About the Fundamental Accounting

question 7

Multiple Choice

Which of the following is true about the fundamental accounting equation?

• A)It may be expressed as assets + liabilities = owners' equity.
• B)It is always expressed as assets = liabilities - owners' equity.
• C)It must remain in balance at all times.
• D)One side of the equation must equal zero.

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Definitions:

Charitable Purpose

involves activities carried out for the benefit of the public, such as alleviating poverty, advancing education, religion, or other activities serving the public interest.

Promised Gift

A commitment to transfer ownership of an item or property to someone else without expecting something in return.

Consideration

A value promised in a contract that each party agrees to exchange, which is necessary for a valid agreement.

Liquidated Debts

Debts for which the amount owed is known and agreed upon by all parties involved.