All of the Following Are Acceptable Ways of Stating the Accounting

question 67

Multiple Choice

All of the following are acceptable ways of stating the accounting equation except

• A) owners' equity = assets ― liabilities.
• B) assets = liabilities + owners' equity.
• C) owners' equity ― liabilities = assets.
• D) assets ― liabilities = owners' equity.
• E) assets = shareholders' equity + liabilities.

---

Definitions:

Direct Costs

Expenses that can be directly linked to the production of specific goods or services, like materials and labor.

Completed-Contract

Completed-contract method is an accounting technique used to recognize the revenues and expenses of long-term projects only upon their completion.

Percentage-of-Completion

A method of revenue recognition in accounting where revenue and expenses are recognized as a project progresses, based on the percentage of work completed.

Revenue Recognition

The accounting principle that dictates the process and timing by which revenue is recorded and recognized as income on the financial statements.