Question

Which of the following, equations properly represents a derivation of the fundamental accounting equation?
(a) Assets + Liabilities = Owner Equity
(b) Asset = Owner Equity
(c) Cash = Assets
(d) Assets - Liabilities = Owner Equity

• A. Only (a)
• B. Both (a) & (b)
• C. All (a), (b), (c), (d)
• D. None of these

Answer 1

The correct option is D None of these

Accounting is based on dual aspect which signifies that for every debit, there will be a credit and vice versa.

Accounting Equation may be defined as:

Owners Equity + Liabilities = Total Assets

i.e.

Capital + Reserves & surplus + Liabilities = Fixed Assets + Current Assets.