In the expanded version of the accounting equation income and expenses are sub-groupings of:
A) assets.
B) equity.
C) liabilities.
D) bank.

Question

Quizplus · Accepted Answer

In the expanded version of the accounting equation, income and expenses are sub-groupings of equity. Income increases equity and expenses decrease equity. Assets and liabilities are not affected by income and expenses directly, but rather, they are impacted by the changes in equity. The bank is not a category in the accounting equation.

In the Expanded Version of the Accounting Equation Income and Expenses