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:

Market Equilibrium

A situation in a market where the quantity supplied equals the quantity demanded, often corresponding to an equilibrium price.

Price Ceiling

A maximum limit set by the government on the price of a good or service, intended to protect consumers.

Market Price

The price at which an asset or service is currently being traded in a given market.

Supply Curve

A graphical representation of the relationship between the price of a good or service and the amount that suppliers are willing to offer for sale, typically upward sloping because higher prices incentivize more production.