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Why do total assets equal the sum of total liabilities and equity? Explain.
Assets = Liabilities + Equity
Assets are the items of value that a business owns. Liabilities are claims on the business through non-owners, and equity is the owners' claim on the business. The sum of the equity and liabilities is the total capital contributed to the business that by definition equals the total value of the assets.
Q. Estimation of Working Capital? A firm must estimate in advance as to how much net working capital will be required for the smooth operations of the business. Only then, it c
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