Multiple Choice
A company has liabilities of $25,000 and assets of $35,000. What is the company's equity?
1. Introduction to Accounting
Fundamental Accounting Equation
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If a company has liabilities of $65,000 and equity of $25,000, what are the company's assets worth?
A
$25,000
B
$40,000
C
$60,000
D
$90,000
Verified step by step guidance1
Understand the accounting equation: Assets = Liabilities + Equity.
Identify the given values: Liabilities = $65,000 and Equity = $25,000.
Substitute the given values into the accounting equation: Assets = $65,000 + $25,000.
Perform the addition to find the total assets: Add $65,000 and $25,000.
Conclude that the company's assets are worth the sum of its liabilities and equity.
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