An Alternative Form of the Accounting Equation Is

question 116

Multiple Choice

An alternative form of the accounting equation is:

• A)Net Income = Revenues
• Expenses.
• B)Stockholders' Equity = Assets + Liabilities.
• C)Assets = Liabilities
• Stockholders' Equity.
• D)Assets
• Liabilities = Stockholders' Equity.

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Definitions:

Liabilities

Financial obligations or debts owed by a company to outside parties, including loans, accounts payable, and mortgages.

Credit Balance

Credit Balance refers to the amount of money a company owes to its customers, creditors, or depositors in their respective accounts.

Credits

Accounting entries that decrease assets or increase liabilities and equity on the balance sheet.

Debits

In accounting, debits are entries on the left side of an account ledger, indicating increases in asset or expense accounts, or decreases in liability, equity, or revenue accounts.