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

The accounting equation is assets = liabilities + equity. In this case, the assets and equity are given as $12,000 and $4,000 respectively. Therefore, the liabilities can be calculated as follows:

Liabilities = Assets - Equity 
Liabilities = $12,000 - $4,000 
Liabilities = $8,000

So, the answer is true.

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