Which of the following is true regarding the accounting equa

Which of the following is true regarding the accounting equation? a) assets will always equal liabilities minus owner\'s equity b) owner\'s equity will always equal assets plus liabilities c) assets will always equal revenues minus expenses d) assets will always equal liabilities plus owner\'s equity

Solution

Correct Answer                (D) Assets will always equal Liabilities plus Owner’s Equity.

Explanation

Assets include Current assets and noncurrent assets. Liability side of a balance sheet is divided into two parts that is Liabilities an Owner’s Equity. Owner’s Equity consist of Common stock , Preference stock, Retained Earnings and other reserves of profit. Liabilities and Owner’s equity is equal to total assets of the business.