Which of the Following Is Not a Satisfactory Statement of the Accounting

question 175

Multiple Choice

Which of the following is not a satisfactory statement of the accounting equation?

• A) Assets = Liabilities + Stockholders' Equity
• B) Assets - Stockholders' Equity = Liabilities
• C) Assets = Liabilities - Stockholders' Equity
• D) Assets - Liabilities = Stockholders' Equity

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Definitions:

Residual Income

The amount of income that an individual or company retains after accounting for all operating expenses and cost of capital.

Operating Assets

Assets that are used by a company in its daily operations to generate revenue, excluding any investment or non-operational assets.

Net Operating Income

The profit derived from a company's regular business activities, excluding deductions of interest and taxes.

Return On Investment

A performance measure used to evaluate the efficiency or profitability of an investment or compare the efficiency of a number of different investments.