What is the difference between owners' equity and non-current liabilities given the following: Owners' equity R 50000, Debtors R 12 500, Cash R 16000, Creditors R 7000, Long-term loan R 48000?
Select one: a. R 41000 b. R 7000 c. R 2000 d. R 8000

Question

High School

We appreciate your visit to What is the difference between owners equity and non current liabilities given the following Owners equity R 50000 Debtors R 12 500 Cash R 16000. This page offers clear insights and highlights the essential aspects of the topic. Our goal is to provide a helpful and engaging learning experience. Explore the content and find the answers you need!

Answer :

OliviaMariThompson OliviaMariThompson · Answer 1 · 2025-01-05T13:44:44-05:00

In the context of financial statements, owners' equity and non-current liabilities are important components of a company's balance sheet:

Owners' Equity: This represents the amount of money that the owners have invested in the business plus any retained earnings. It is essentially the residual interest in the assets of the company after deducting liabilities. In this scenario, the owners' equity is given as R 50,000.
Non-current Liabilities: These are long-term financial obligations that are not due within the current accounting year. They typically include long-term loans, bonds payable, etc. Here, the long-term loan is a non-current liability valued at R 48,000.

To find the difference between owners' equity and non-current liabilities, we perform the following calculation:

[tex]\text{Difference} = \text{Owners' Equity} - \text{Non-current Liabilities} \\
\text{Difference} = R 50,000 - R 48,000 = R 2,000[/tex]

Therefore, the difference between the owners' equity and non-current liabilities is R 2,000.

Thus, the correct option is c. R 2000.