Which of the following formulations of the accounting equation is incorrect?
A)assets - liabilities = equity
B)assets = liabilities + equity
C)assets = liabilities + opening equity + (revenues - expenses)+ (owner additions to - withdrawals from equity)
D)assets = liabilities - equity

Question

Quizplus · Accepted Answer

This formulation is incorrect because it shows assets being equal to liabilities minus equity, which violates the basic accounting equation. The correct equation is assets = liabilities + equity.

Which of the Following Formulations of the Accounting Equation Is