Homework Answers
D.net assets increse during the period.
Since there is no transaction with owners, it can be known whether a profit has been made or not using the increase in net assets.
Net assets = total assets - total liabilities.
This is also known as shareholder's equity portion and it will increase in case an entity earns net income, given that no other transactions with owners have taken place.
Increase in total assets itself is not an indication that profit is earned.
Decrease in total liabilities itself is not an indication that profit is earned.
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For a business, when there are no transactions with the owner(s) in the period, which of...
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Q1-5
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Q1-5
Multiple Choice Questions (20 points) Circle the right answer 1) Which of the following is the CORRECT accounting equation? A) Assets + Liabilities - Owners' equity B) Assets - Liabilities + Owners' equity C) Assets + Revenue - Owners' equity D) Assets + Revenue Liabilities + Expenses 2) Owner's equity is $150,000 and total liabilities are $90,000. Total assets would be: A) $300.000 B) S180,000. C) $60,000. D) $240,000 150, 900 90,000 3) A business settles a liability by...
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