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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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