The Description of the Relation Between a Company's Assets, Liabilities

question 152

Multiple Choice

The description of the relation between a company's assets, liabilities, and equity, which is expressed as Assets = Liabilities + Equity, is known as the:

• A) Return on equity ratio.
• B) Accounting equation.
• C) Net income.
• D) Business equation.
• E) Income statement equation.

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Definitions:

Rational Choice Theory

An economic theory that assumes individuals always make prudent and logical decisions that provide them with the highest amount of personal utility.

Public Interest

The well-being of the general public, often considered within the context of government policy-making.

Tax Incidence

The analysis of the effect of a particular tax on the distribution of economic welfare, including who ultimately pays the tax.

Deadweight Loss

A loss of economic efficiency that occurs when the equilibrium for a good or service is not achieved or is not achievable.