Assets are a. equal to liabilities less stockholders' equity b. always lower than liabilities c. financed by the stockholders and/or creditors d. the same as expenses because they are acquired with cash

Question

Business

Alina Chung

30 June, 14:02

Assets are a. equal to liabilities less stockholders' equity b. always lower than liabilities c. financed by the stockholders and/or creditors d. the same as expenses because they are acquired with cash

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Answers (1)

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Tomas · Answer 1

The answer is C.

Explanation:

Assets of a company or firm is the addition of both liabilities and shareholders' equity.

The capital structure of a company mostly comprises debt and equity i. e it is either financed by debt (short-term and long-term debt) and equity (contribution from its owners).

Option A is not correct. That term is for shareholders' equity and not for asset.

Option B is not correct because either asset or liability can be lower or higher.