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

Answer: (D)

Verified step by step guidance

1. Understand the accounting equation: Assets = Liabilities + Equity.
2. Identify the given values: Liabilities = \$65,000 and Equity = \$25,000.
3. Substitute the given values into the accounting equation: Assets = \$65,000 + \$25,000.
4. Perform the addition to find the total assets: Add \$65,000 and \$25,000.
5. Conclude that the company's assets are worth the sum of its liabilities and equity.