Question

Which one of the following can the accounting equation can be rewritten as?
Select one:
a. Assets – liabilities – opening capital + drawings = profit
b. Assets + profit – drawings - liabilities = closing capital
c. Assets – profit – drawings = closing capital – liabilities
d. Assets – liabilities – drawings = opening capital + profit
Clear my choice

Answer 1

Answer:

The formula can be rewritten: Assets - Liabilities = (Shareholders' or Owners' Equity) These are some simple examples, but even the most complicated transactions can be recorded in a similar way.

Answer 2

Answer:

The accounting equation is basically an equation that states assets are equal to the sum of its liabilities and the equity of shareholders.

Assets = Liabilities + Owner's Equity

The accounting equation is an expression in expanded form that is displayed in the balance sheet. Because for the company it is important for being accurate as every transaction will be represented in two accounts according to Double-Entry System.

In simple words, we can say that all the assets of the company should be equal to the sum of the liability and capital of the owner.

Now, I can conclude from the above statement that

Option a: Assets – liabilities – opening capital + drawings = profit is the correct statement.

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