Which of the Following Describes the Identity Embodied in a Balance

question 281

Multiple Choice

Which of the following describes the identity embodied in a balance sheet?

• A) Net worth plus assets equal liabilities.
• B) Assets plus liabilities equal net worth.
• C) Assets equal liabilities plus net worth.
• D) Assets plus reserves equal net worth.

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Definitions:

Business Combination

A transaction or event in which an acquirer takes control of one or more businesses, such as through merger or acquisition.

Amortized

The process of gradually writing off the initial cost of an asset over a period, in accordance with its estimated useful life.

Equity Method

An accounting technique used to record investments in other companies where the investor has significant influence but not full control.

Amortization

The process of gradually writing off the initial cost of an intangible asset over its useful life.