Which of the following accounting equations is used to compute assets?
A) Assets = Liabilities - Capital + Drawing - Revenue + Expenses
B) Assets = Liabilities + Capital - Drawing - Revenue + Expenses
C) Assets = Liabilities + Capital - Drawing + Revenue - Expenses
D) Assets = Liabilities - Capital + Drawing + Revenue - Expenses

Question

Quizplus · Accepted Answer

The correct accounting equation to compute assets is: Assets = Liabilities + Capital - Drawing + Revenue - Expenses. This equation reflects the basic accounting principle that assets are financed by liabilities, owner's capital, and net income (which is revenue minus expenses, adjusted for drawings).

Which of the Following Accounting Equations Is Used to Compute