Liabilities + Equity Should Always Be

question 54

Multiple Choice

Liabilities + equity should always be:

• A)less than assets
• B)equal to assets
• C)greater than assets
• D)greater than or equal to assets

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Definitions:

Sunk Cost

An expense that has already been incurred and cannot be recovered, which should theoretically not influence any future financial decisions or strategies.

Expensed

The act of charging costs to expense accounts, recognizing them in the income statement in the period they were incurred.

Operation

In a business context, operation refers to the day-to-day activities necessary for running a company, which can include production, distribution, and the provision of services.

CCA Deductions

Refers to Capital Cost Allowance deductions in taxation, allowing businesses to claim depreciation on tangible capital assets.