The accounting equation is:

A Revenue − Expenses = Net Income

B Assets = Liabilities + Equity

C Cash = Revenue − Costs

D Debits = Credits + Revenue

✓ Correct Answer: Option B

The fundamental accounting equation: Assets = Liabilities + Stockholders Equity.

💡 Why is B) the correct answer?

The correct answer to the question "The accounting equation is:" is Option B: Assets = Liabilities + Equity.

The other options — A) Revenue − Expenses = Net Income, C) Cash = Revenue − Costs, D) Debits = Credits + Revenue — are incorrect for this CPA Exam Prep question. As explained above: The fundamental accounting equation: Assets = Liabilities + Stockholders Equity.

📚 About This CPA Exam Prep Practice Question

This 1-level CPA Exam Prep question from the Financial Accounting (FAR) topic is part of BrainForge Quiz's free exam preparation library. Each question includes the correct answer and a detailed explanation to help you understand the underlying concept, not just memorize the answer.

How to use this page: Read the question above, consider all four options (A through D), then check the highlighted correct answer and explanation. For active timed practice, start a free CPA Exam Prep practice test or use flashcards for spaced repetition review.

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The accounting equation is:

✓ Correct Answer: Option B

📚 About This CPA Exam Prep Practice Question

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