Total assets of $550,000 and equity of $200,000 imply total liabilities of

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Multiple Choice

Total assets of $550,000 and equity of $200,000 imply total liabilities of

Explanation:
On a balance sheet, assets must equal liabilities plus equity. So liabilities = assets − equity. Here, assets are 550,000 and equity is 200,000, so liabilities = 550,000 − 200,000 = 350,000. The total liabilities are 350,000. This makes sense because if liabilities were any other amount, the assets wouldn’t balance with the given equity under the basic accounting equation.

On a balance sheet, assets must equal liabilities plus equity. So liabilities = assets − equity.

Here, assets are 550,000 and equity is 200,000, so liabilities = 550,000 − 200,000 = 350,000. The total liabilities are 350,000.

This makes sense because if liabilities were any other amount, the assets wouldn’t balance with the given equity under the basic accounting equation.

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