The assets of a company total $700,000; the liabilities, $200,000. What are the claims of the owners?
A) $900,000.
B) $700,000.
C) $500,000.
D) $200,000.
E) It is impossible to determine unless the amount of this owners' investment is known.

Question

Quizplus · Accepted Answer

The claims of the owners can be calculated by subtracting the liabilities from the assets: $700,000 - $200,000 = $500,000. Therefore, the correct answer is C. Option A is incorrect, as it is the total of assets and claims of owners. Option B is incorrect, as it includes liabilities in addition to assets. Option D is incorrect, as it represents only the liabilities, not the claims of owners. Option E is incorrect, as the calculation can be done without knowing the amount of the owners' investment.

The Assets of a Company Total $700,000; the Liabilities, $200,000