Multiple Choice
Which of the following statements about par value is true?
71
views
1. Introduction to Accounting
Fundamental Accounting Equation
Struggling with Financial Accounting?
Join thousands of students who trust us to help them ace their exams!Watch the first videoMultiple Choice
If the assets of a company total \$700 and its liabilities are \$250, what is the amount of owner's equity according to the fundamental accounting equation?
A
\$450
B
\$950
C
\$250
D
\$700
Verified step by step guidance1
Understand the fundamental accounting equation: Assets = Liabilities + Owner's Equity. This equation is the foundation of financial accounting and helps determine the relationship between a company's resources and claims against those resources.
Identify the values provided in the problem: Assets = \$700 and Liabilities = \$250. The goal is to calculate Owner's Equity using the equation.
Rearrange the fundamental accounting equation to solve for Owner's Equity: Owner's Equity = Assets - Liabilities.
Substitute the given values into the rearranged equation: Owner's Equity = \$700 - \$250.
Perform the subtraction to determine the amount of Owner's Equity. This will give you the final value, which corresponds to one of the multiple-choice options provided.
8:45mWatch next
Master Fundamental Accounting Equation with a bite sized video explanation from Brian
Start learningRelated Videos
Related Practice
Fundamental Accounting Equation practice set
Problem sets built by lead tutorsExpert video explanations