Answered: deficit

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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If the total asset is smaller than total liabilities and equity on the balance sheet, what does that mean ( deficit or surplus)?
And if it's a deficit should I add the AFN amount to cash and cash equivalents or to accruals and other payables? or to debt?

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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If it is a deficit why should add AFN amount to cash and cash equivalents, not to debt? can you clarify this, please

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