If Liabilities (L) Are $9,200 And Owner's Equity (OE) Is $6,000, What Is The Amount Of The Assets (A)? | MCQ Question Answer

Answer With Brief Explanation

The correct choice of this multiple choice question is (d), as by applying Accounting Equation we get the following result:

Assets = Liabilities + Owner’s Equity

Given:

Liabilities = $9,200

Owner’s Equity = $6,000

Required:

Assets = ?

By, putting the values, we have:

Assets = $92,00 + $6,000

Assets = $15,200

Accounting equation does not show that assets are equal to the Difference Between Liabilities and Owner’s Equity but it shows that the sum of liabilities and owner’s equity for the accounting period.

So, assets are $15,200 as accounting equation shows that the sum of liabilities and owner’s equity is always equal to assets (resources) of the business. If the equation is not in balance, then there are surely mistakes, errors or frauds in the preparation of Financial Statements.