Which of the Following Is Correct with Respect to the Issue

question 127

Multiple Choice

Which of the following is correct with respect to the issue of owners' equity?

• A) Owners' equity is meaningful for investors,but not for lenders.
• B) If a company's assets exceed its liabilities,owners' equity will be negative.
• C) Owners' equity consists of two sources of capital: the amount the owners originally invested and the amount of government loans the company has received.
• D) Even if a company operates profitably,its liabilities may increase faster than its assets.
• E) The basic accounting equation can be rewritten as follows: owners' equity equals assets minus liabilities.

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