Question

Machvile Corporation, a robotics company, decides to acquire Chancera Inc., a start-up company that operates within the same industry. To better assess its decision, the management of Machvile Corporation needs to find out the value of Chancera Inc.'s total assets. The management has information regarding Chancera Inc.'s liabilities and stockholders' equity. In this scenario, the management should most likely use the _____ to get the required information.

Answer 1

Answer: Accounting equation

Step-by-step explanation:

The accounting equation is a proposition or formula that accesses a company's assets by summing up it's equity and liabilities. It means that the equity of a company would equal it's assets minus liabilities.

Machvile Corporation can access properly the worth of Chancera Inc.'s by using the Accounting equation, weighing their assets and leaving out their liabilities.