Which one of the following correctly represents one of the basic financial statement models?
A)Assets − Liabilities = Net Income
B)Assets + Liabilities = Total Assets
C)Revenues + Expenses = Net Income
D)Beginning Retained Earnings + Net Income − Dividends = Ending Retained Earnings

Question

Quizplus · Accepted Answer

Option D represents the basic accounting equation for the statement of retained earnings, which is a financial statement model that shows changes in the retained earnings account over a period of time. Option A represents an incorrect equation that does not take into account revenues or expenses, while option B represents the basic accounting equation for the balance sheet. Option C represents the basic equation for the income statement.

Which One of the Following Correctly Represents One of the Basic