Fix the broken accounting formula

Exercise and reference answers

Questions

1. Statement parts

   1. Assets
   2. =
   3. Liabilities
   4. -
   5. Owners equity

   Correction

   +

   Incorrect part

   -

2. Statement parts

   1. Gross profit
   2. =
   3. net sales
   4. plus
   5. cost of goods sold

   Correction

   minus

   Incorrect part

   plus

3. Statement parts

   1. Net working capital
   2. =
   3. current assets
   4. times
   5. current liabilities

   Correction

   minus

   Incorrect part

   times

4. Statement parts

   1. Retained earnings
   2. =
   3. total profits
   4. plus
   5. all dividends paid

   Correction

   minus

   Incorrect part

   plus

5. Statement parts

   1. Debt-to-equity
   2. =
   3. owners equity
   4. over
   5. total liabilities

   Correction

   total liabilities over owners equity

   Incorrect part

   owners equity

Instructions

Tap the one word or symbol in each line that is wrong.

Explanation