Question

1.The net assets of a corporation are equal to: Total assets - total liabilities. Total assets...

1.The net assets of a corporation are equal to:

Total assets - total liabilities.

Total assets + total liabilities.

Total assets + retained earnings.

Total assets - retained earnings.

2.

Which statement is true about a stock split?

A change in total stockholders' equity depends upon whether it is a 2-for-1 split or a 3-for-1 split.

Total shareholders' equity decreases.

Total shareholders' equity remains the same.

Total shareholders' equity increases.

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Homework Answers

Answer #1

1. Option A... Total assets - Total liabilities

Net assets is defined as total assets minus total liabilities. In a corporation the amount of net assets is reported as stockholders' equity.

2. Option C... Total shareholders equity remain the same.

When a company declares a stock split, the number of shares of that company increases, but the market cap remains the same. Existing shares split, but the underlying value remains the same.

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