Which of the following best describes why the left and right sides of a statement of financial position are equal?
A) In a properly run business,the value of liabilities will not exceed the assets held by the company.
B) By definition,the assets plus the liabilities will be the same as the stockholders' equity.
C) The assets must equal liabilities plus stockholders' equity,because stockholders' equity is the difference between the assets and the liabilities.
D) By accounting convention,the assets of a company must be equal to the liabilities of that company.
E) Assets must always exceed liabilities or the company will be bankrupt.
Correct Answer:
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