Which of the Following Best Describes Why the Left and Right

question 36

Multiple Choice

Which of the following best describes why the left and right sides of a statement of financial position are equal?

• A)In a properly run business,the value of liabilities will not exceed the assets held by the company.
• B)By definition,the assets plus the liabilities will be the same as the stockholders' equity.
• C)The assets must equal liabilities plus stockholders' equity,because stockholders' equity is the difference between the assets and the liabilities.
• D)By accounting convention,the assets of a company must be equal to the liabilities of that company.
• E)Assets must always exceed liabilities or the company will be bankrupt.

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Definitions:

BoardSource

An organization that provides resources and support for nonprofit board members and leaders.

Advocacy Policies

Initiatives or actions undertaken to support and promote a particular cause or policy idea.

General Public

Refers to the ordinary people in society at large who do not have any special role or position in governmental or specific institutional contexts.

Fraternal Organizations

Groups or societies formed based on common interests, professions, or purposes, often with a focus on mutual aid and community service.