BACHELOR OF BUSINESS ADMINISTRATION

BUSINESS ADMINISTRATION

FINANCIAL ACCOUNTING

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
The total amount of assets minus total liabilities will give you the worth of the business or the ____
A
income statement
B
balance sheet
C
owner’s equity
Explanation: 

Detailed explanation-1: -The shareholders’ equity number is a company’s total assets minus its total liabilities. It can be defined as the total number of dollars that a company would have left if it liquidated all of its assets and paid off all of its liabilities. This would then be distributed to the shareholders.

Detailed explanation-2: -Assets minus Liabilities equals Fund Balance (also called Net Assets). An asset is something ownedeither cash or something that could be sold or collected to turn into cash, like equipment or a receivable. A liability is something owedsuch as a payment to a vendor (an account payable) or a mortgage on a building.

Detailed explanation-3: -Net worth is the total value of all assets minus any liabilities. Put simply, net worth is what you own minus what you owe. Calculating net worth can be a helpful way to determine one’s wealth and the overall health of a person’s or company’s financial situation.

Detailed explanation-4: -The formula for owner’s equity is: Owner’s Equity = Assets – Liabilities. Assets, liabilities and subsequently the owner’s equity can be derived from a balance sheet.

Detailed explanation-5: -Equity is a common financial term used in business operations, investing and more. All assets minus total liabilities equals total equity. This balance can be used to determine the profitability of a company or to determine an investor’s stake of ownership.

There is 1 question to complete.