Which of the following is correct with respect to the issue of owners' equity?
A) It is the amount of cash listed on the balance sheet.
B) It is the amount of money the owners would receive if they sold all of a company's assets and paid all of its liabilities.
C) If a company's assets exceed its liabilities, owners' equity equals $10 000 for each dollar of assets.
D) If a company's liabilities exceed its assets, owners' equity equals minus $10 000 for each dollar of liabilities.
E) All of these are correct.

Question

Quizplus · Accepted Answer

Owners' equity represents the amount of money that would belong to the owners if all the company's assets were sold and all its liabilities were paid off. Option A is incorrect because cash is just one component of assets, and owners' equity is calculated after taking into account all assets and liabilities. Option C and D are incorrect because the value of owners' equity is not determined by a fixed formula based on the relationship between assets and liabilities.

Which of the Following Is Correct with Respect to the Issue