Which Is a True Statement Regarding the Accounting Equation

question 173

Multiple Choice

Which is a true statement regarding the accounting equation?

• A)The equation can be stated as assets minus liabilities equals equity.
• B)The equation consists of three parts: assets,liabilities,and net income.
• C)The equation is an optional tool for accountants to use.
• D)The equation does not need to balance during a specific period.

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Definitions:

EIC

The Earned Income Credit, a refundable tax credit for low- to moderate-income working individuals and families, particularly those with children.

Tax Liability

The total amount of tax that an individual or business is legally obligated to pay to a taxing authority.

Premium Tax Credit

A refundable credit that helps eligible individuals and families cover the premiums for their health insurance purchased through the Marketplace.

Household Income

Represents the total gross income of all members of a household, encompassing all sources of income including salaries, bonuses, dividends, and any other income streams before taxes.