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What interpretation can be made from this equity figure? a.It is a negative figure, so theoretically speaking, the business is solvent. b.It is a negative figure, so theoretically speaking, the business is bankrupt. c.It is a positive figure, so theoretically speaking, the business is bankrupt. d.It is a positive figure, so theoretically speaking, the business is solvent.

What interpretation can be made from this equity figure? a.It is a negative figure, so theoretically speaking, the business is solvent. b.It is a negative figure, so theoretically speaking, the business is bankrupt. c.It is a positive figure, so theoretically speaking, the business is bankrupt. d.It is a positive figure, so theoretically speaking, the business is solvent.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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What interpretation can be made from this equity figure?

a.It is a negative figure, so theoretically speaking, the business is solvent.

b.It is a negative figure, so theoretically speaking, the business is bankrupt.

c.It is a positive figure, so theoretically speaking, the business is bankrupt.

d.It is a positive figure, so theoretically speaking, the business is solvent.

Mr Arendse has asked you for some assistance with his financials. The following balances appeared in the books of his business as at the end of October 2016. Name of account Business Loan: BizDirect Bank Manufacturing machinery Creditors control Debtors control Warehouse building Balance (R) 339,200 84,000 358,400 26,700 800,000 Name of account Mortgage bond - Warehouse Petty cash Delivery vehicle Bank-Overdraft Office furniture Balance (R) 700,000 7,000 264,200 56,400 120,000
Transcribed Image Text:Mr Arendse has asked you for some assistance with his financials. The following balances appeared in the books of his business as at the end of October 2016. Name of account Business Loan: BizDirect Bank Manufacturing machinery Creditors control Debtors control Warehouse building Balance (R) 339,200 84,000 358,400 26,700 800,000 Name of account Mortgage bond - Warehouse Petty cash Delivery vehicle Bank-Overdraft Office furniture Balance (R) 700,000 7,000 264,200 56,400 120,000
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