The Difference Between a Firm's Assets and Liabilities Is Its

question 4

Multiple Choice

The difference between a firm's assets and liabilities is its

• A)accounting profit.
• B)economic profit.
• C)net worth.
• D)implicit costs.

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Definitions:

Liabilities

Financial obligations or debts that a company owes to others, reflecting amounts that must be paid in the future.

Authorized Shares

The maximum number of shares a corporation is legally allowed to issue, as stipulated in its articles of incorporation.

Treasury Stock

Shares that were issued and later reacquired by the issuing company, reducing the amount of outstanding stock on the open market.

Cash Dividend

A share of a company's profits paid out to its shareholders in cash.