Which of the Following Equations Is Correct

question 3

Multiple Choice

Which of the following equations is correct?

• A) Assets plus Liabilities = Equity.
• B) Assets = Liabilities minus Equity.
• C) Liabilities = Assets plus Equity.
• D) Equity = Assets minus Liabilities.

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Definitions:

Debit Memo

An adjustment notice sent to suppliers indicating a reduction in the amount due, typically for returned goods or invoice errors.

Miscellaneous Expense

Costs incurred by a business that don't fit into standard expense categories.

Journal

A record where transactions are entered in chronological order before they are posted to ledgers.

Liability

Represents financial obligations or debts that a company or individual owes to others, payable in the future.