Assets Should Always Be

question 44

Multiple Choice

Assets should always be:

• A) equal to liabilities.
• B) greater than equity.
• C) less than liabilities + equity.
• D) equal to liabilities + equity.

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Definitions:

Overstated

A term used when financial statements or records reflect a higher amount than what is accurate or true.

Cost of Goods Sold

Straightforward expenses incurred in the manufacture of merchandise a company sells, involving costs of materials and labor.

Days' Sales

A financial metric that estimates a company's average collection period for receivables, often expressed in days.

Solvency

The ability of a company to meet its long-term debts and financial obligations.