The assets of a business total $20,000; the liabilities, $8,000. The claims of the owners are
A) $0
B) $8,000
C) $12,000
D) $20,000
E) $28,000

Question

Quizplus · Accepted Answer

The claims of the owners can be calculated using the equation: Assets = Liabilities + Owner's Equity. Rearranging this equation, we get Owner's Equity = Assets - Liabilities. Substituting the given values, we get Owner's Equity = $20,000 - $8,000 = $12,000. Therefore, the correct choice is C.

The Assets of a Business Total $20,000; the Liabilities, $8,000