WAEC Accounting 2020 Objective — Question 39

Question 39 of 50 from the West African Examinations Council (WAEC) Accounting 2020 Objective paper, with the correct answer and a full explanation.

Accounting equation of a business shows the

A. current assets and current liabilities only
B. difference between current assets and liabilities. C. assets and the sources of financing them.
C. assets and the sources of financing themCorrect
D. owner's interest in the business only

Explanation

The accounting equation is Asset = Capital + Liabilities. Thus, it is an expression which shows the worth of a business and the source (of financing/funding) of that worth.

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