Question

When projecting the balance sheet, what happens when the initial balance sheet yields estimated total assets greater than the sum of total liabilities and equity?

a. The company will need additional financing from external sources.
b. The company will not be able to pay for expenses in the future.
c. The company projected a loss.
d. The company has negative stockholders equity.
e. None of the above

Answer 1

The correct answer is E

Step-by-step explanation:

Assets is the one, which is any kind of resourced owned by the business and could be used in future for the benefit of the business. So, in this case, the balance sheet, states that the estimated total assets are more than the total equity and the liabilities, which represent that the company or the business is in good state that the liabilities of the company are paid off and the equity is also balanced, the company is still in good situations as have the total assets.