The Balance of the Account Is Determined by

question 129

Multiple Choice

The balance of the account is determined by

• A) adding all of the debits to all of the credits.
• B) always subtracting the debits from the credits.
• C) always subtracting the credits from the debits.
• D) adding all of the debits, adding all of the credits, and then subtracting the smaller sum from the larger sum.

---

Definitions:

Stockholder's Equity

The ownership interest of shareholders in the assets of a corporation, represented by their shares of the company's stock.

Owners

Individuals or entities that hold legal possession and control over a business or asset, having a claim on the business's profits and an obligation for its debts.

Corporation

A legal entity that is separate and distinct from its owners, who are known as shareholders, and has its own rights and obligations.

Financial Reports

Documents that provide an overview of a company's financial condition, including income statements, balance sheets, and cash flow statements.