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Question

If total assets of a business are Rs. 180,000 and net worth is Rs. 50,000, the outside liability will be ___________.

A
Rs. 130,000
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B
Rs. 230,000
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C
Rs. 180,000
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D
Rs. 50,000
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Solution

The correct option is B Rs. 130,000
Accounting equation says:

Owners Equity+outsiders liability=Total Assets

Owners Equity =Net worth

Hence Total Assets-Net worth= Outsiders liability

i.e Rs.180000-Rs.50000= Rs.130000 is outside liability.

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