Asked by Zachary Summach on May 10, 2024
Verified
If total Liabilities are $2,000 and total Assets are $16,000, Owner's Equity must be:
A) $14,000.
B) $9,000.
C) $16,000.
D) $18,000.
Total Liabilities
The sum of all financial obligations and debts owed by a company to external entities or individuals.
- Grasp the rudimentary aspects of the accounting equation (Assets = Liabilities + Owner's Equity).
- Understand how liabilities affect the accounting equation.
Verified Answer
RJ
Rinaldo JosephMay 11, 2024
Final Answer :
A
Explanation :
Owner's Equity is calculated as Total Assets minus Total Liabilities. Therefore, $16,000 (Total Assets) - $2,000 (Total Liabilities) = $14,000 (Owner's Equity).
Learning Objectives
- Grasp the rudimentary aspects of the accounting equation (Assets = Liabilities + Owner's Equity).
- Understand how liabilities affect the accounting equation.