Question

As Willard’s business grows and propsers, his company’s total assets requirements will equal ___________. total sources of financing less net assets and owner’s investment spontaneous debt financing plus bank loans plus owner’s investment less retained earnings spontaneous debt financing plus bank loans plus owner’s investment plus retained earnings total sources of financing less owner’s investment and retained earnings

Answer 1

Answer: Spontaneous debt financing plus bank loans plus owners investment plus retained earnings.

Explanation: It is the general rule in accounting that assets of any business entity will always be equal to the capital invested from different sources and the liabilities taken over by the business for funds. Debt, owners equity and retained earnings are a source of capital  whereas bank loans is a liability .

Answer 2

Answer:

As the company grows and prospers, it's total assets requirement will be equal to spontaneous debt financing plus bank loans plus owner's investment plus retained earnings.

Explanation:

The total asset requirement can be defined as the book value of a set of assets that are just adequate to meet a particular solvency test. The company's total asset requirement will include company's capital and liabilities. Here, the bank loans can be classified as liability. While the others are source of capital for the company.