The Owner's Equity of Leyla's Company is equal to one-quarter of the total assets. Liabilities equal $30,000. What is the amount of Owner's Equity?
A) $40,000
B) $10,000
C) $30,000
D) None of these answers are correct.

Question

Quizplus · Accepted Answer

Owner's Equity is one-quarter of total assets. If liabilities are $30,000, then total assets are $40,000 (since liabilities + owner's equity = total assets). Therefore, Owner's Equity is $10,000 (one-quarter of $40,000).

The Owner's Equity of Leyla's Company Is Equal to One-Quarter