Which one of the following represents the expanded basic accounting equation? Select one: a. Assets = Revenues + Expenses – Liabilities b. Assets + Dividends + Expenses = Liabilities + Common stock + Retained Earnings + Revenues c. Assets = Liabilities + Common stock + Retained Earnings + Dividends – Revenues – Expenses d. Assets – Liabilities – Dividends = Common stock + Retained Earnings + Revenues – Expenses

The correct answer is b. Assets + Dividends + Expenses = Liabilities + Common stock + Retained Earnings + Revenues

To understand why this is the right answer, let's start with the basic accounting equation:

Assets = Liabilities + Equity

Now, Equity can be expanded to include Common Stock, Retained Earnings, and Dividends. Retained Earnings themselves are influenced by Revenues (which increase Retained Earnings) and Expenses (which decrease Retained Earnings). Combining these relations, we can expand the basic equation to include these elements.

When we incorporate Revenues and Expenses explicitly, we have to move them to the other side of the equation because Revenues increase Equity (or Retained Earnings, more specifically), while Expenses and Dividends decrease Equity.

So, the expanded accounting equation becomes:

Assets + Dividends + Expenses = Liabilities + Common Stock + Retained Earnings (previous retained earnings increased by Revenues, decreased by Expenses)

Hence, answer b correctly represents the expanded basic accounting equation.