Questions: An alternative way to write the accounting equation would be:
Assets + Equity = Liabilities
Assets - Liabilities = Equity
Assets + Liabilities = Equity
Equity = Liabilities - Assets
Transcript text: An alternative way to write the accounting equation would be:
Assets + Equity $=$ Liabilities
Assets - Liabilities $=$ Equity
Assets + Liabilities $=$ Equity
Equity $=$ Liabilities - Assets
Solution
The answer is the second one: Assets - Liabilities = Equity.
Explanation for each option:
Assets + Equity = Liabilities: This is incorrect. The basic accounting equation is Assets = Liabilities + Equity. This option incorrectly rearranges the components.
Assets - Liabilities = Equity: This is correct. By rearranging the basic accounting equation (Assets = Liabilities + Equity), we get Assets - Liabilities = Equity.
Assets + Liabilities = Equity: This is incorrect. This option does not follow the basic accounting equation and misrepresents the relationship between assets, liabilities, and equity.
Equity = Liabilities - Assets: This is incorrect. This option incorrectly rearranges the basic accounting equation. The correct rearrangement should be Equity = Assets - Liabilities.
Summary:
The correct alternative way to write the accounting equation is Assets - Liabilities = Equity. This correctly represents the relationship between the components of the accounting equation.