Which one of the following is equivalent to the expanded basic accounting equation?
A) Assets = Liabilities + Owner's Capital + Owner's Drawings - Revenues - Expenses.
B) Assets + Owner's Drawings + Expenses = Liabilities + Owner's Capital + Revenues.
C) Assets - Liabilities - Owner's Drawings = Owner's Capital + Revenues - Expenses.
D) Assets = Revenues + Expenses - Liabilities.

Question

Quizplus · Accepted Answer

The expanded basic accounting equation is Assets + Expenses + Owner's Drawings = Liabilities + Owner's Equity + Revenues. This equation takes into account the effect of transactions on the owner's equity. Option B correctly rearranges these components, showing the relationship between a company's resources (assets, expenses, and drawings) and its sources of resources (liabilities, owner's capital, and revenues).

Which One of the Following Is Equivalent to the Expanded