The Assets of a Business Total $20,000; the Liabilities, $8,000

question 202

Multiple Choice

The assets of a business total $20,000; the liabilities, $8,000. The claims of the owners are

• A) $0
• B) $8,000
• C) $12,000
• D) $20,000
• E) $28,000

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Definitions:

Noncompete Agreement

A legal contract preventing one party from entering into or starting a similar profession or trade in competition against another party.

Bargained-For Exchange

In reference to agreements, when a promise is made in exchange for another promise, in exchange for an act, or in exchange for a forbearance to act.

Contracts For Necessaries

Legal agreements for the supply of essential goods or services, such as food, shelter, and clothing, especially pertinent to persons unable to enter into contracts, like minors.

Educational Loans

Financial aid provided to students to help cover the cost of education expenses, which must be repaid.