Question

If a company has stockholders' equity of $60,000 at the end of the year, which of the following statements must be true?A. The company's assets exceed liabilities by $60,000.B. The company has issued $60,000 of common stock.C. Net income for the year equals $60,000.D. Total revenues during the year equal $60,000

Answer 1

Answer:

A. The company's assets exceed liabilities by $60,000

Explanation:

According to the accounting equation the Assets are equal to the liabilities plus the equity. With the information given in the exercise you must use this equation.

Assets = liabilities+ Equity

Assets= Liabilities + $60.000

Assets- Liabilities = $60.000

As you can see, you can conclude that the assets are grater that the liabilities only by $60.000.

There are lack of information for the B option, C Option and D option, and you can't make that type of statement without more information about the companies operations.