Accounting: Tools for Business Decision Making, 5th Edition

Published by Wiley
ISBN 10: 1118128168
ISBN 13: 978-1-11812-816-9

Chapter 1 - Introduction to Financial Statements - Questions - Page 27: 14

Answer

Assets = Liabilities + Stockholder's Equity

Work Step by Step

Assets are the resources owned by the business. Liabilities are the amounts owed to creditors in the form of debts and other obligations. Stockholder's Equity is the owners’ claim to assets. The Balance Sheet is prepared based on this equation.
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