In the Context of Balance Sheets, Which of the Following

question 21

Multiple Choice

In the context of balance sheets, which of the following is a difference between liabilities and owners' equity?

• A) Liabilities refer to the claims internal stakeholders have against the external stakeholders, whereas owners' equity refers to claims external stakeholders have against the internal stakeholders.
• B) Liabilities indicate the claims outsiders have against the firm's assets, whereas owners' equity refers to the claims the owners have against their firm's assets.
• C) Owners' equity indicates the claims internal stakeholders have against the firm's assets, whereas liabilities refer to the claims external stakeholders have against the firm's assets.
• D) Owners' equity indicates the claims outsiders have against the firm's assets, whereas liabilities refer to the claims the owners have against their firm's assets.

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Definitions:

Reactives

Substances or entities that undergo a chemical reaction or a response in particular situations or under specific conditions.

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