Asked by Brooke Thompson on May 11, 2024
Verified
If the Liabilities owed by a business total $150,000, then the Assets must also total $150,000.
Liabilities
Financial obligations or debts owed by a business to others, which must be settled over time through the transfer of economic benefits.
Assets
Resources owned or controlled by an entity that are expected to produce economic value.
- Comprehend the basic principles of the accounting equation (Assets = Liabilities + Owner's Equity).
- Comprehend the impact of liabilities on the accounting equation.
Verified Answer
YC
Yusmichel CanteroMay 11, 2024
Final Answer :
False
Explanation :
The accounting equation states that Assets = Liabilities + Equity, not just Assets = Liabilities. Therefore, the total assets could be more than the liabilities if there is positive equity.
Learning Objectives
- Comprehend the basic principles of the accounting equation (Assets = Liabilities + Owner's Equity).
- Comprehend the impact of liabilities on the accounting equation.