If the Liabilities of a Business Are $85,000 and the Owners

question 191

Multiple Choice

If the liabilities of a business are $85,000 and the owners' equity is $110,000,which of the following is a correct statement?

• A) Assets equal $25,000.
• B) Assets equal $195,000.
• C) Assets equal $110,000.
• D) Assets equal $85,000.
• E) It is impossible to determine the value of the assets.

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Definitions:

Variable Manufacturing Overhead

Costs associated with manufacturing that vary with production volume, such as indirect materials and utilities.

Direct Labor-Hour

A measurement of labor used in production, specifically the time spent by direct labor workers on a given job or project.

Manufacturing Overhead Budget

An estimation of all manufacturing overhead costs planned for a specific period, which includes indirect costs related to manufacturing.

Selling and Administrative Expense Budget

A financial plan that estimates future sales, administrative expenses, and related activities over a specific period.