Which of the Following Best Describes Why the Left and Right

question 65

Multiple Choice

Which of the following best describes why the left and right sides of a balance sheet are equal?

• A)By definition, the assets plus the liabilities will be the same as the shareholders' equity.
• B)In a properly run business, the value of liabilities will not exceed the assets held by the company.
• C)The assets must equal liabilities plus shareholders' equity, because shareholders' 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.

---

Definitions:

Business Ownership

Refers to the legal possession of a business enterprise, including sole proprietorship, partnership, or corporation.

Franchisor

A business entity that grants licenses to franchisees to operate under its brand and sell its products or services.

Negotiate

The process of discussing terms and reaching agreements in various contexts, such as business deals, contracts, or disputes.

Large Volume Purchases

Transactions involving the procurement of goods in large quantities, typically resulting in cost savings or discounted pricing from suppliers.