If total assets of a company equal $12,000 and total stockholders' equity equals $4,000,then total liabilities equal $8,000.

Question

Quizplus · Accepted Answer

This is because the equation for the balance sheet is Assets = Liabilities + Stockholders' Equity. Therefore, if we know the values of total assets and stockholders' equity, we can solve for total liabilities by subtracting stockholders' equity from total assets. In this case, $12,000 - $4,000 = $8,000, so the answer is A.

If Total Assets of a Company Equal $12,000 and Total