JAMB Accounting 2020 Objective — Question 21

Question 21 of 40 from the Joint Admissions and Matriculation Board (JAMB) Accounting 2020 Objective paper, with the correct answer and a full explanation.

21. Which of the following is correct?

A. A. Capital + current liabilities = Assets + long term liabilities
B. B. Assets - current assets = fixed asset + long term liability
C. C. Capital - current asset = fixed asset - long term liabilitiesCorrect
D. D. Long term liability - capital = Assets + current liabilities

Explanation

The accounting equation is Asset = Capital + Liability. Through mathematical manipulation: Capital - fixed assets + current liability = current asset - long term liabilities.

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