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:

Sale Of Land

A transaction involving the transfer of ownership of land property from one party to another.

Loss

A financial condition where expenses exceed revenue, resulting in a negative profit for a business.

Income Statement

An income statement is a financial statement that reports a company's financial performance over a specific accounting period, detailing revenues, expenses, and profits or losses.

Net Income

The net income a company generates once it subtracts all costs and taxes from its total earnings.