Which of the following is correct if at the end of Crystal Imports' first year of operations,Assets are $800,000 and Owners' Equity is $720,000?
A)The owner(s)must have invested $800,000 to start the business.
B)The business must be operating profitably.
C)Liabilities are $80,000.
D)Liabilities are $1,520,000.

Question

Quizplus · Accepted Answer

The accounting equation states that Assets = Liabilities + Owners' Equity. Given that Assets are $800,000 and Owners' Equity is $720,000, subtracting Owners' Equity from Assets gives Liabilities of $80,000 ($800,000 - $720,000 = $80,000).

Which of the Following Is Correct If at the End