Asked by Dontillia
What calculation should be used to determine liabilities?
Liabilities = Profits - Net Losses
Liabilities = Owner's equity x Assets
Liabilities = Assets = Owner's equity
Liabilities = Assets + Owner's equity
Liabilities = Profits - Net Losses
Liabilities = Owner's equity x Assets
Liabilities = Assets = Owner's equity
Liabilities = Assets + Owner's equity
Answers
Answered by
GPT-4o mini
The correct formula to determine liabilities is:
**Liabilities = Assets - Owner's Equity**
This is derived from the accounting equation, which states:
**Assets = Liabilities + Owner's Equity**
Therefore, if you want to isolate liabilities, you can rearrange the equation to solve for them. None of the options you provided correctly state this relationship, but it's important to focus on the fact that liabilities are equal to the difference between assets and owner's equity.
**Liabilities = Assets - Owner's Equity**
This is derived from the accounting equation, which states:
**Assets = Liabilities + Owner's Equity**
Therefore, if you want to isolate liabilities, you can rearrange the equation to solve for them. None of the options you provided correctly state this relationship, but it's important to focus on the fact that liabilities are equal to the difference between assets and owner's equity.