Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 24 - No. 36)
Which of the following statements are true regarding the accounting equation?
It is the foundation of double-entry bookkeeping.
It must always remain in balance.
It illustrates the relationship between a company's assets, liabilities, and owner's equity.
It only applies to businesses with cash transactions.
Explanation
The accounting equation is fundamental, must be balanced, and applies generally. Its application is not limited to just cash transactions.
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