Which of the following is not a proper form of the accounting equation?

A. fixed assets + current assets – liabilities = capital
B. fixed assests + current assests + liabilities = capital
C. fixed assets – liabilities + current assets = capital
D. fixed asset + current asset – capital = liabilities

Correct Answer:

Option B – fixed assests + current assests + liabilities = capital

Explanation

The simplest presentation of capital employed is total assets minus current liabilities. Sometimes, it is equal to all current equity plus interest-generating loans (non-current liabilities).