ECONOMICS
MONEY MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Calculate the “Total Assets” Cash $4, 670Investment account $26, 910Credit card debt $2, 670 House value $93, 780House mortgage-$76, 230
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$125, 360
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$204, 260
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$31, 580
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$78, 900
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Explanation:
Detailed explanation-1: -Total Assets = Liabilities + Owner’s Equity The equation must balance because everything the firm owns must be purchased from debt (liabilities) and capital (Owner or stockholders equity).
Detailed explanation-2: -Calculate the owner’s total assets You can do so by subtracting the value of your liabilities from the value of your equity. For example, if the same company that has a net income of $425, 000 possesses liabilities worth $250, 000 and equity worth $1, 000, 000, its total assets equal $750, 000.
Detailed explanation-3: -Total liabilities will have to be divided by the company’s total assets to obtain the debt-to-asset ratio.
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