Q.Accounting equation signifies :

The accounting equation states Assets = Capital + Liabilities, so option (c) is correct.

Based on the dual aspect concept in the Tamil Nadu HSC Class-11 Accountancy syllabus, every rupee of resource a business controls (assets) must be funded from one of two sources:

• Capital — funds contributed by the owner, and
• Liabilities — funds owed to outsiders (creditors, loans).

Hence:

• Assets = Capital + Liabilities …

Liabilities = Assets − Capital = 1,20,000 − 1,00,000 = ₹20,000, so the correct answer is option (c).

Applying the accounting equation, Assets = Capital + Liabilities, rearranged as Liabilities = Assets − Capital.

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The valid accounting equation is Assets = Capital + Liabilities; the form "Liabilities = Assets + Capital" is incorrect.

The accounting equation expresses the dual-aspect concept: every asset of a business is financed either by the owner (capital) or by outsiders (liabilities). The fundamental equation is:

Assets = Capital + Liabilities

Valid rearrangements are:

• Assets = Liabilities + Capital — option (b), correct.
• Capital = Assets − Liabilities — option (c), correct.
• Assets = Capital + Liabilities — option (d), correct. …

The accounting equation states Assets = Capital + Liabilities, so the answer is (c).

The accounting equation flows from the dual aspect concept: every rupee of resources a business controls (assets) must have been supplied by someone — either the owner (capital/owner's equity) or outside parties (liabilities). Therefore:

Assets = Capital + Liabilities

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