Which of the following is not a proper form of the accounting equation
A. fixed assets + current assets - liabilities = capital B. fixed assests + current assests + liabilities = capital C. fixed assets – liabilities + current assets = capital D. fixed asset + current asset – capital = liabilities
Correct Answer: B
Explanation
The simplest presentation of capital employed is total assets minus current liabilities. Sometimes, it is equal to all current equity plus interest-generating loans (non-current liabilities).