Which of the Following Does the Accounting Equation State

question 87

Multiple Choice

Which of the following does the accounting equation state?

• A) Revenue = Expense
• B) Assets = Liabilities + Owners' Equity
• C) Liabilities = Owners' Equity
• D) Net income = Long-term Liabilities

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Definitions:

Tax Act of 1989

Legislation enacted to amend, revise, or change the tax laws existing at that time, specific to a given jurisdiction.

Depreciation Method

A methodical strategy for distributing the expense of a physical asset across its lifespan.

Straight-line Method

A method of allocating an asset's cost evenly over its useful life for the purposes of calculating depreciation.

MACRS

Modified Accelerated Cost Recovery System, a method of depreciation for tax purposes that allows faster depreciation in the initial years of an asset's life.