Accounting · Accounting Equation

The entire system of double-entry bookkeeping is based on which fundamental accounting equation?

Verified Solution4 OptionsUpdated: October 2026👁️1 View

1Net Profit = Gross Profit - Operating Expenses
2Working Capital = Current Assets - Current Liabilities
3Gross Profit = Net Sales - Cost of Goods Sold
4Capital = Assets - Liabilities✓

Correct answer

Capital = Assets - Liabilities

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The entire system of double-entry bookkeeping is based on which fundamental accounting equation?

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The entire system of double-entry bookkeeping is based on which fundamental accounting equation?

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