Liabilities are what a company owes its owners in future products or services.Equity refers to the claims of its owners.
举一反三
- The owner's equity refers to the remaining equity held by the owners after deducting liabilities of corporate assets.
- Assets= liabilities + owners’ equity
- The assets of a company total $700,000; the liabilities, $200,000. What are the claims of the owners? A: $900,000. B: $700,000. C: $500,000. D: $200,000. E: It is impossible to determine unless the amount of this owners' investment is known.
- A business has assets of $140,000 and liabilities of $60,000. How much is its owners'equity? A: $0 B: $140,000 C: $80,000 D: $200,000
- If a firm has a debt to owners' equity ratio of .75 (or 75%) we can conclude that A: it has relied more on debt than equity to finance its operations. B: the firm is likely to have trouble paying its short-term debts when they come due. C: its total liabilities are less than its owners' equity. D: the firm has expenses that are exactly 75% of its gross profit.