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Foundations of Business - Standalo...

4th Edition
William M. Pride + 2 others
ISBN: 9781285193946

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BuyFindarrow_forward

Foundations of Business - Standalo...

4th Edition
William M. Pride + 2 others
ISBN: 9781285193946
Textbook Problem

What can be said about a firm whose owners’ equity is a negative amount? How could such a situation come about?

Summary Introduction

To determine: The thought about a firm whose owners’ equity is a negative amount.

Introduction: Owners’ equity, regularly called net assets, is the owners' claim to organization assets after the greater part of the liabilities have been paid off. Basically, if the business assets were liquidated to pay off creditors, the abundance cash left finished would be viewed as owners' equity.

Explanation

The thought about a firm whose owners’ equity is a negative amount are as follows:

These firms are either bankrupt or encountering serious fiscal issues...

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