The Owner's Equity of Logan's Company Is Equal to One-Half

question 58

Multiple Choice

The Owner's Equity of Logan's Company is equal to one-half of the total assets.Liabilities equal $40,000.What is the amount of Owner's Equity?

• A)$20,000
• B)$40,000
• C)$30,000
• D)None of these answers is correct.

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Definitions:

Principal-Agent Problem

A dilemma in economics occurring when one party (the agent) is able to make decisions and/or take actions on behalf of, or that impact, another party (the principal).

Profit-Sharing Plans

A company program that gives employees a share in the profits of the company.

Residual Claimants

Individuals or entities entitled to a share of a company's profits after all obligations have been met.

Team Production

A production process in which employees work together under the supervision of the owner or the owner’s representative.