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Stockholders' equity is different between a company's assets and its liabilities.

a)True
b)False

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Final answer:

Stockholders' equity being the difference between a company's assets and liabilities is true. It represents the company's net worth, calculated as assets minus liabilities, and is a critical indicator of financial health.

Step-by-step explanation:

The statement that stockholders' equity is the difference between a company's assets and its liabilities is true. A T-account in accounting separates assets on the left from liabilities and net worth (or stockholders' equity) on the right. Assets are valuables a company owns, like cash, inventory, and property. Liabilities are what the company owes, such as loans and mortgages. The net worth or stockholders' equity of a company is calculated by subtracting total liabilities from total assets. This concept is vital for understanding a company's financial health, with positive net worth indicating a potentially healthy financial position and negative net worth often signifying financial distress.

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