A balance sheet lists assets of $310,000 and liabilities of $185,000. What is owner's equity?
Correct Answer
D) $125,000.
Owner's equity equals assets minus liabilities: $310,000 - $185,000 = $125,000.
Why This Is the Correct Answer
Owner's equity equals assets minus liabilities: $310,000 - $185,000 = $125,000.
Why the Other Options Are Wrong
Option A: $495,000.
$495,000. is above the supported result for balance sheet; it likely adds an unsupported amount or compares the wrong financial base.
Option B: $185,000.
$185,000. is above the supported result for balance sheet; it likely adds an unsupported amount or compares the wrong financial base.
Option C: $310,000.
$310,000. is above the supported result for balance sheet; it likely adds an unsupported amount or compares the wrong financial base.
Memory Technique
Balance Sheet drawer for Reviewing Contractor'S: label owner's before counting dollars.
Reference Hint
Study anchor (closed-book): memorize Balance sheet from CSLB Law and Business Study Guide; CSLB 2026 Law Book / CSLB Law and Business Study Guide Business Finances; know the rule or calculation trigger without relying on exam-room lookup.
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