According to the accountant for Michael's Floral Supply, the firm's assets are $124,000 and its liabilities are $31,000. Which of the following statements is true?
A) The owners' equity is $155,000.
B) The owners' equity is $93,000.
C) The firm's current assets are $62,000.
D) The firm's current liabilities are $24,000.
E) The firm's accounting equation won't balance.

Question

Quizplus · Accepted Answer

The accounting equation states that Assets = Liabilities + Owner's Equity. Therefore, Owner's Equity can be calculated as follows:

Owner's Equity = Assets - Liabilities 
Owner's Equity = $124,000 - $31,000 
Owner's Equity = $93,000

Therefore, option B is the correct answer. Option A, C, D, and E are incorrect.

According to the Accountant for Michael's Floral Supply, the Firm's