Given Assets total 6,000 and Liabilities 1,000 and Equity 5,000, which statement is true?

Unlock all questions

This demo includes only 20 questions. Upgrade to access hundreds of questions, flashcards, exam simulations, and disable ads.

Full question bankExam simulationsFlashcards
From $24.99Unlock all

Prepare for the Tracking Assets and Sales Test with comprehensive flashcards and multiple choice questions. Understand each concept with clear hints and explanations. Ace your exam confidently!

Multiple Choice

Given Assets total 6,000 and Liabilities 1,000 and Equity 5,000, which statement is true?

Explanation:
The accounting equation is in play: Assets must equal Liabilities plus Equity. With these numbers, Liabilities plus Equity is 1,000 + 5,000 = 6,000, which matches Assets. So the statement that assets equal liabilities plus equity is true and precisely reflects the balance on the books. While it’s also true that assets exceed liabilities here, the defining relationship shown is the equality A = L + E, which is why this statement is the best answer. The other options would require relationships that aren’t supported by the numbers (liabilities exceeding assets, or equity exceeding assets).

The accounting equation is in play: Assets must equal Liabilities plus Equity. With these numbers, Liabilities plus Equity is 1,000 + 5,000 = 6,000, which matches Assets. So the statement that assets equal liabilities plus equity is true and precisely reflects the balance on the books. While it’s also true that assets exceed liabilities here, the defining relationship shown is the equality A = L + E, which is why this statement is the best answer. The other options would require relationships that aren’t supported by the numbers (liabilities exceeding assets, or equity exceeding assets).

More Multiple Choice Questions
Subscribe

Get the latest from Examzify

You can unsubscribe at any time. Read our privacy policy