Assets represent what a business owns, while liabilities represent the claims creditors have against a company's assets.

Question

Quizplus · Accepted Answer

This statement accurately defines assets and liabilities. Assets are the resources owned by the business, such as cash, inventory, and equipment, while liabilities refer to the obligations or debts that a company owes to others, such as loans, accounts payable, and accrued expenses. Liabilities represent the claims that creditors and other stakeholders have against the company's assets.

Assets Represent What a Business Owns, While Liabilities Represent the Claims