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If a business has assets of $ 200000 and equity of $ 125000​, then liabilities must equal

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Final Answer:

If a business has assets of $200,000 and equity of $125,000, then liabilities must equal $75,000.

Step-by-step explanation:

The accounting equation is Assets = Liabilities + Equity. In this scenario, assets are given as $200,000, and equity is $125,000. To find liabilities, rearrange the equation as Liabilities = Assets - Equity. Substituting the given values, Liabilities = $200,000 - $125,000, resulting in $75,000. This calculation represents the portion of the business's financing provided by external sources (liabilities), with equity representing the owner's stake. Therefore, in this specific case, liabilities would amount to $75,000 to maintain the balance in the accounting equation.

User James Menkal
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