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      Question

      The basic accounting equation

      is:
      A Assets = Liabilities + Capital Correct Answer Incorrect Answer
      B Assets + Liabilities = Capital Correct Answer Incorrect Answer
      C Assets + Capital = Liabilities Correct Answer Incorrect Answer
      D Assets = Liabilities - Capital Correct Answer Incorrect Answer

      Solution

      The accounting equation is the cornerstone of double-entry bookkeeping. It states that all assets are either financed by borrowing money (liabilities) or by the owners' contributions (capital).

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