Which of the following best describes liabilities and stockholders' equity?
Posted: Sat Aug 07, 2021 6:45 am
A) They are the sources of financing an entity's assets.
B) They are the economic resources owned by a business entity
C) They are reported on the income statement.
D) They both increase when assets increase.
Answer: A
Explanation: Liabilities are a source of financing from creditors. Stockholders' equity is a source
of financing from stockholders.
B) They are the economic resources owned by a business entity
C) They are reported on the income statement.
D) They both increase when assets increase.
Answer: A
Explanation: Liabilities are a source of financing from creditors. Stockholders' equity is a source
of financing from stockholders.