To determine whether Brenda is correct about her assets being greater than her liabilities, we need to understand what assets and liabilities are.
- Assets are items of value that someone owns. They can include things like jewelry, wages, commission, bank accounts, and tips.
- Liabilities are obligations or debts that someone needs to pay. These can include expenses such as food, health insurance, and rent.
Let's look at the choices provided:
1. Brenda is correct because she has five assets and only three liabilities.
- The number of items listed in each column does not necessarily reflect their total value. The assets could have a lower total value than the liabilities even if they are more in number.
2. Brenda is correct because all the items should be in the assets column of the balance sheet.
- This is incorrect as the balance sheet correctly differentiates between assets and liabilities. Items like food, health insurance, and rent are clearly liabilities.
3. Brenda is not correct because the total value of her assets could be less than the liabilities.
- This is a valid statement. Even though she has listed more types of assets, the actual total monetary value of these assets might be less than the total monetary value of her liabilities.
4. Brenda is not correct because she needs to list more liabilities.
- Listing more liabilities doesn't directly address whether her current assessment of assets exceeding liabilities is accurate. It's about comparing the total values rather than the number of items listed.
Given this analysis, the statement that best explains whether Brenda is correct is:
Brenda is not correct because the total value of her assets could be less than the liabilities.
In essence, Brenda's belief that her assets are greater than her liabilities is flawed since it's possible for the total monetary value of her liabilities to exceed her assets.
