This a MCQ (Multiple Choice Question) based practice test of Chapter 3- Recording of Transactions of Accountancy of Class XI (11) for the quick revision/preparation of School Board examinationsQ The Basicaccountingequation isa)Assets= Cash + Capitalb)Assets = Expenses + Capitalc)Assets = Capital + Liabilitiesd)Asset = Expense + IncomeCorrect answer is option 'C'. Can you explain this answer?

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Answer is c because it is a basic accounting equation

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Assets = liability+ capital it is a basic accounting equation and it is just basic you can also write asset equal capital+liability the answer will remain the same

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Since every business transaction affects at least two of a organization's accounts, the accounting equation will always be “in balance,” meaning the left side should always equal the right side. Thus, the accounting formula essentially shows that what the firm owns (its assets) is purchased by either what it owes (its liabilities) or by what its owners invest (its shareholders equity or capital).

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Pass general entry from the following                       2014 1 April Sohan started business with cash Rs 60000 goods Rs 50000 and furniture Rs 20000

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Answer_ c

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C

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Answer c because it is basic Accounting equation method so Assets =capital + liabilities

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Explanation:

Basic Accounting Equation:
The basic accounting equation is a fundamental principle of accounting which states that assets of a business are equal to the sum of its liabilities and owner's equity. It can be represented as:
Assets = Liabilities + Owner's Equity

Explanation of each component:
- Assets: Assets are resources owned by a business that have economic value. These include cash, inventory, equipment, and property.
- Liabilities: Liabilities are obligations of a business to pay debts or fulfill other financial commitments. These include loans, accounts payable, and accrued expenses.
- Owner's Equity: Owner's equity represents the owner's claim on the assets of the business after deducting liabilities. It is also known as net assets or net worth.

Application to the given options:
- Option 'A' (Assets = Cash + Capital): This equation does not represent the basic accounting equation as it does not include liabilities.
- Option 'B' (Assets = Expenses + Capital): This equation is incorrect as expenses are not part of the assets side of the equation.
- Option 'C' (Assets = Capital + Liabilities): This is the correct representation of the basic accounting equation where assets are equal to the sum of capital (owner's equity) and liabilities.
- Option 'D' (Asset = Expense + Income): This equation does not follow the basic accounting equation as it includes expenses and income, which are not part of the assets side of the equation.
Therefore, option 'C' is the correct answer as it correctly represents the basic accounting equation.

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