WAEC Accounting 2015 Paper

Concept:The accounting equation shows the relationship between assets, liabilities, and capital (owner's equity).Explanation:The fundamental accounting equation is:$$\text{Assets} = \text{Liabilities} + \text{Capital}$$Rearranging this equation to solve for capital gives:$$\text{Assets} - \text{Liabilities} = \text{Capital}$$This means the owner's claim equals the residual value of assets after paying off all liabilities.Option A is incorrect because capital and assets are added, not combined with liabilities.Options C and D incorrectly mix different asset and liability classifications.Answer:B. Assets - liabilities = Capital