Which of the Following Balance Sheet Equations Is Incorrect

question 22

Multiple Choice

Which of the following balance sheet equations is incorrect?

• A) Assets - Liabilities = Shareholders' Equity
• B) Assets = Liabilities + Shareholders' Equity
• C) Assets - Current Liabilities = Long Term Liabilities
• D) Assets - Current Liabilities = Long Term Liabilities + Shareholders' Equity

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Definitions:

After-Tax Discount Rate

A discount rate that has been adjusted to reflect the impact of taxes.

Straight-Line Depreciation

A technique for determining the depreciation of an asset through uniformly distributing its cost across its lifespan.

Operating Cash Inflow

The cash generated from a company's normal business operations, reflecting its ability to generate consistent earnings.

After-Tax Discount Rate

The rate of return on an investment after adjusting for taxes, used in net present value and other discounted cash flow analyses.