Identify the option that indicates the correct term for the given explanation.
Answer to Problem 1QY
The correct answer is option (c).
Explanation of Solution
Assets: These are the resources owned and controlled by business and used to produce benefits for the company. Assets are classified on the balance sheet as current assets, non-current assets, property, plant, and equipment, and intangible assets.
Justification for correct answer: Assets are the properties owned and controlled by the businesses to generate income for the company. Hence, option (c) is correct.
Justification for incorrect answers:
- Option (a) is incorrect because liabilities are the debt obligations owed by company to creditors.
- Option (b) is incorrect because owners’ equity is the financial interest of the owner to invest in the business.
- Option (d) is incorrect because option (c) is the correct answer and the phrase ‘none of the above’ is incorrect.
Therefore, option (c) is correct answer.
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Chapter 1 Solutions
Bundle: College Accounting: A Career Approach (with QuickBooks Online), Loose-leaf Version, 13th + LMS Integrated CengageNOWV2, 1 term (6 months) Printed Access
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