Question 16 of 23beginner🧠 RememberVery Short1 mark
What is the basic accounting equation?
Correct Answer
The basic accounting equation is:
Assets = Liabilities + Capital
Exercise: Questions for Practice - Short Answers | Q: 3 | (Page 19)
For More Understanding
Explanation
According to the textbook context, the duality principle is expressed in terms of the fundamental Accounting Equation. This equation states that the assets of a business are always equal to the claims of owners (Capital/owners' equity) and the outsiders (Liabilities/creditors' equity). This concept forms the core of the Double Entry System of accounting.