Question

Which of the following balance sheet equations is​ INCORRECT? A. Assets minus Current liabilities​ = Longminusterm liabilities​ + Shareholders' equity B. Assets​ = Liabilities​ + Shareholders' equity C. Assets minus Current liabilities​ = Longminusterm liabilities D. Assets minus Liabilities​ = Shareholders' equity

Answer 1

Answer:

Option C is incorrect because the correct equation is as under:

Assets = Equity + Liability......................Equation1

And

Liabilities = Current Liability + Long term Liability

By putting values in the equation we have:

Assets = Equity + Current Liability + Long term Liability

Now placing Current liabilities on left side would change its sign:

Assets - Current Liability = Equity + Long term Liability

So the option C is incorrect.

Answer 2

Answer:

C

Explanation:

This balance sheet equation is incorrect, Assets minus Current liabilities​ = Longminusterm liabilities