CBSE · Class 11 · Accountancy · Theory Base of AccountingWhich of the following represents the accounting equation?
Step-by-Step Solution
The basic accounting equation is Assets = Liabilities + Capital, which reflects that the total claims of outsiders (liabilities) and owners (capital) on the assets of the business are always equal to the total assets.
Detailed Options Breakdown
Option : Assets = Liabilities + Capital (Correct Answer)
Correct choice. Refer to the step-by-step verified solution guidelines above for details.
Option 1: Assets = Capital - Liabilities
Incorrect choice. This distractor represents a common misunderstanding of the core principles of Theory Base of Accounting.
Option 2: Capital = Assets + Liabilities
Incorrect choice. This distractor represents a common misunderstanding of the core principles of Theory Base of Accounting.
Option 3: Liabilities = Assets + Capital
Incorrect choice. This distractor represents a common misunderstanding of the core principles of Theory Base of Accounting.
💡 Study Guide: This question tests core syllabus concepts from Theory Base of Accounting. For formulas, key summaries, and mock exam reference guides, read the full Theory Base of Accounting Revision Notes.