Final answer:
2) False
Break-even analysis does not determine a firm's total liabilities but rather the point where revenue and expenses equal.
A T-account outlines a firm's assets and liabilities, ensuring total assets equal total liabilities plus net worth. The given firm's accounting profit is $50,000.
Step-by-step explanation:
Break-even analysis is false in determining the total liabilities of a firm. Instead, break-even analysis is a financial calculation to determine the point at which a company's revenue exactly covers its expenses. At this point, the company does not make a profit or a loss.
In terms of T-accounts, the "T" separates the assets on the left from the liabilities and net worth on the right. Net worth is positioned on the liabilities side to ensure the T-account balances to zero. It's essential to realize that in a T-account, the total assets will always be equal to the total liabilities plus net worth. This fundamental accounting principle underlies the structure of balance sheets.
For the self-check question about the firm's accounting profit: Accounting profit is calculated by subtracting the total expenses from the sales revenue. The firm's accounting profit would be $50,000 ($1,000,000 sales revenue - $600,000 labor - $150,000 capital - $200,000 materials).