The accounting equation is defined as:
A)Common Stock + Retained Earnings = Stockholders' Equity.
B)Revenues - Expenses = Net Income.
C)Revenues - Expenses - Dividends = Retained Earnings.
D)Assets = Liabilities + Stockholders' Equity.

Question

Quizplus · Accepted Answer

The accounting equation, also known as the balance sheet equation, states that assets must always equal the sum of liabilities and stockholders' equity. This is expressed as Assets = Liabilities + Stockholders' Equity. While the other answer choices are important accounting concepts, they do not fully define the accounting equation.

The Accounting Equation Is Defined As