In the casework package file, a balance sheet lists assets of $240,000 and liabilities of $146,000. What is owner's equity?
Correct Answer
D) $94,000.
Owner's equity equals assets minus liabilities: $240,000 - $146,000 = $94,000.
Why This Is the Correct Answer
Owner's equity equals assets minus liabilities: $240,000 - $146,000 = $94,000.
Why the Other Options Are Wrong
Option A: $386,000.
$386,000 adds the $146,000 liabilities instead of subtracting it. The correct calculation is 240,000 - 146,000 = 94,000.
Option B: $146,000.
$146,000 reports the $146,000 liabilities alone instead of subtracting it from the $240,000 assets. The correct calculation is 240,000 - 146,000 = 94,000.
Option C: $240,000.
$240,000 leaves out the $146,000 liabilities. The correct calculation is 240,000 - 146,000 = 94,000.
Reference Hint
Study anchor (closed-book): memorize Balance sheet equation 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.
Independent practice; verify any reference hint against the edition and category permitted for your booking. Official exam and reference-list sources →
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