{"id":208941,"date":"2025-04-28T08:22:54","date_gmt":"2025-04-28T08:22:54","guid":{"rendered":"https:\/\/learnexams.com\/blog\/?p=208941"},"modified":"2025-04-28T08:22:56","modified_gmt":"2025-04-28T08:22:56","slug":"if-assets-are-99000-and-liabilities-are-32000-2","status":"publish","type":"post","link":"https:\/\/www.learnexams.com\/blog\/2025\/04\/28\/if-assets-are-99000-and-liabilities-are-32000-2\/","title":{"rendered":"If assets are $99,000 and liabilities are $32,000"},"content":{"rendered":"\n<p>If assets are $99,000 and liabilities are $32,000, then equity equals:<\/p>\n\n\n\n<p>a. $32,000.<br>b. $67,000.<br>c. $99,000.<br>d. $131,000.<br>e. $198,000.<\/p>\n\n\n\n<p><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-ast-global-color-6-color\"><strong>The correct answer and explanation is :<\/strong><\/mark><\/p>\n\n\n\n<p>The correct answer is <strong>b. $67,000<\/strong>.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Explanation:<\/h3>\n\n\n\n<p>The basic accounting equation, which underlies the concept of double-entry accounting, is:<\/p>\n\n\n\n<p><strong>Assets = Liabilities + Equity<\/strong><\/p>\n\n\n\n<p>In this equation, assets represent what the company owns (such as cash, property, or equipment), liabilities represent what the company owes (like loans or accounts payable), and equity represents the owner\u2019s interest in the company.<\/p>\n\n\n\n<p>Given the information:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Assets = $99,000<\/li>\n\n\n\n<li>Liabilities = $32,000<\/li>\n<\/ul>\n\n\n\n<p>We can use the accounting equation to find the equity:<\/p>\n\n\n\n<p><strong>Equity = Assets &#8211; Liabilities<\/strong><\/p>\n\n\n\n<p>Substituting the given values:<\/p>\n\n\n\n<p><strong>Equity = $99,000 &#8211; $32,000<\/strong><\/p>\n\n\n\n<p><strong>Equity = $67,000<\/strong><\/p>\n\n\n\n<p>Thus, the equity of the company is $67,000.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Understanding the Calculation:<\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Assets<\/strong> are the total resources controlled by the company. In this case, they are valued at $99,000.<\/li>\n\n\n\n<li><strong>Liabilities<\/strong> represent the financial obligations or debts of the company, which amount to $32,000 in this scenario.<\/li>\n\n\n\n<li><strong>Equity<\/strong> is essentially what is left for the company\u2019s owners after all liabilities are settled. It\u2019s the residual value after subtracting liabilities from assets.<\/li>\n<\/ul>\n\n\n\n<p>This value, $67,000, represents the net worth of the company, which is the owners&#8217; stake or ownership interest in the business after accounting for all liabilities. It can also be seen as the value of the company that the owners have &#8220;earned&#8221; through their investments or contributions.<\/p>\n\n\n\n<p>By adhering to the accounting equation, we ensure that the financial statements are balanced, and this principle applies universally to all companies. So, in this case, the equity is clearly $67,000, which corresponds to option <strong>b<\/strong>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>If assets are $99,000 and liabilities are $32,000, then equity equals: a. $32,000.b. $67,000.c. $99,000.d. $131,000.e. $198,000. The correct answer and explanation is : The correct answer is b. $67,000. Explanation: The basic accounting equation, which underlies the concept of double-entry accounting, is: Assets = Liabilities + Equity In this equation, assets represent what the [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[25],"tags":[],"class_list":["post-208941","post","type-post","status-publish","format-standard","hentry","category-exams-certification"],"_links":{"self":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/208941","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/comments?post=208941"}],"version-history":[{"count":0,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/208941\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/media?parent=208941"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/categories?post=208941"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/tags?post=208941"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}