Another way to state the accounting equation is:
A)Assets = Liabilities + Paid-in Capital - Common Stock.
B)Assets + Liabilities = Stockholders' Equity.
C)Assets = Liabilities + Paid-in Capital + Retained Earnings.
D)Assets = Liabilities - Paid-in Capital - Dividends.

Question

Quizplus · Accepted Answer

The accounting equation states that assets must always equal liabilities plus stockholders' equity. Stockholders' equity is composed of two parts, paid-in capital and retained earnings. Therefore, the correct formulation is Assets = Liabilities + Paid-in Capital + Retained Earnings.

Another Way to State the Accounting Equation Is