You Are Solvent If Your

question 84

Multiple Choice

You are solvent if your:

• A) total liabilities exceed your total assets.
• B) total assets exceed your total liabilities.
• C) total assets exceed your equity.
• D) total liabilities exceed your equity.
• E) current liabilities exceed your current assets.

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Definitions:

Journal Entry

A record in accounting that represents each transaction with debits and credits in financial accounts.

Plant Assets

Long-term tangible assets that are used in the production of goods or services and are not intended for resale, including buildings, machinery, and equipment.

Double-Declining Balance

An accelerated method of depreciation where an asset loses value at double the rate of traditional straight-line depreciation.

Depreciation Method

An accounting technique used to allocate the cost of a tangible asset over its useful life, reflecting its consumption, wear and tear, or obsolescence.