Question

An alternative form of the accounting equation is:A. Net Income = Revenues ‐ Expenses.B. Stockholders' Equity = Assets + Liabilities.C. Assets = Liabilities ‐ Stockholders' Equity.D. Assets ‐ Liabilities = Stockholders' Equity

Answer 1

Answer:

D. Assets ‐ Liabilities = Stockholders' Equity

Explanation:

D option is the same expression asthe accounting equation.

$Assets = Liabilities + Equity$

The liabilities moves to the other side, therefore, their sign changes to negative:

$Assets - Liabilities = Equity$

The other identities are not a correct derivate from the accounting equation (B) and (C)

And option (A) while it is a correct formula, it is the formula for Net income, which is not related to the basic accounting equation