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 earned during the year equal $60,000.

Question

Quizplus · Accepted Answer

Stockholders' equity represents the residual claims of the owners on the assets of the company after all liabilities have been satisfied. Therefore, stockholders' equity can be calculated as assets minus liabilities. If stockholders' equity is $60,000, it means that the company's assets exceed its liabilities by $60,000.

If a Company Has Stockholders' Equity of $60,000 at the End