Question

1. Which of the following does not indicate the accounting equation correctly?

1.Assets-Liabilities - Equity
2.Assets = liabilities + equity
3.Equity-Liabilities = Assets
4.Assets- Equity Liabilities​

Answer 1

3. Equity - Liabilities = Assets

Step-by-step explanation:

The accounting equation is one that shows the relationship that exists among equity/ capital, assets and liabilities of an entity. It can be used to determine any of the three variables if the values of two are known.

The equation is given as:

Equity = Assets - Liabilities

i. We can say;

Assets - Liabilities - Assets = 0 (which is expression 1)

ii. We can say;

Assets = Equity + Liabilities (which is expression 2)

iii. We can say also that:

Assets - Equity = Liabilities (which is expression 4)

Thus in the given question, expression 3 does not indicate accounting equation.