Another way to state the accounting equation is:
A) Assets = Liabilities + Paid-in Capital - Common Stock
B) Assets = Liabilities + Retained Earnings
C) Assets = Liabilities + Paid-in Capital + Retained Earnings
D) Assets = Liabilities - Paid-in Capital - Dividends

Question

Quizplus · Accepted Answer

The accounting equation states that Assets must equal Liabilities plus Equity. Equity is made up of both Paid-in Capital (contributions from owners) and Retained Earnings (profits that have been kept in the company). Therefore, the correct equation is Assets = Liabilities + Paid-in Capital + Retained Earnings.

Another Way to State the Accounting Equation Is