# What is the correct expanded accounting equation?

## What is the correct expanded accounting equation?

The expanded accounting equation reveals all of the components of the shareholders’ equity part of the accounting equation. The expanded equation is: Assets = Liabilities + (Paid in Capital – Dividends – Treasury Stock + Revenue – Expenses)

What are the accounting equation examples?

The accounting equation can be rearranged into three different ways: Assets = Liabilities + Owner’s Capital – Owner’s Drawings + Revenues – Expenses. Owner’s equity = Assets – Liabilities. Net Worth = Assets – Liabilities.

### How many elements are there in the expanded accounting equation?

The expanded accounting equation takes the basic accounting equation and splits equity into its four main elements: owner’s capital, owner’s withdrawals, revenues, and expenses.

What is the meaning of a l/c r e and d in expanded accounting equation?

In algebra we can change the expanded accounting equation expressed as A = L + C + R – E – D into A + E + D = L + C + R. It means, that the debit and credit rule for assets, expenses and drawing/dividends is the opposite of the debit and credit rule for liabilities, capital and revenues.

## Which of the following is not correct expanded accounting equation?

The equation is: Owner’s Funds+liaberties=Total Assets Capital+Reserves&Surplus=Fixed Assets+Current Assets. Therefore booths the sides are equal i.e assets and liabilities. Hence below equation is not correct Assets-Liabilities=Equity.

How do you calculate the accounting equation?

How to Calculate the Accounting Equation: Definition and Examples

1. Assets = Liabilities + Equity.
2. If a company has \$20,000 in liabilities, \$50,000 in assets and \$40,000 in shareholders’ equity, then the accounting formula would be:
3. Assets = Liabilities + Paid-in capital + Revenues – Expenses – Dividends – Treasury.

### Which of the following is not a correct expanded accounting equation?

What are the 3 formulas of accounting equation?

The three elements of the accounting equation are assets, liabilities, and shareholders’ equity. The formula is straightforward: A company’s total assets are equal to its liabilities plus its shareholders’ equity.

## What is the meaning of a l C R E and D in an expanded accounting equation?

How do you solve accounting equation problems?

Solution. The basic accounting equation is: Assets = Liabilities + Owner’s equity. Therefore, If liabilities plus owner’s equity is equal to \$300,000, then the total assets must also be equal to \$300,000.

### How do you solve accounting problems?

Here we outline six ways to solve the majority of your accounting issues.

1. Know the difference between profit and cash flow.
2. Understand the impact of purchasing assets.