Situation in which firm limits expenditures on capital is classified as________?

A firm reports total liabilities of Rs. 300,000 and owner’s equity of Rs. 500,000. What would be the total worth of the firm’s assets?

A. Rs. 300,000
B. Rs. 500,000
C. Rs. 800,000
D. Rs. 1100,000

Assets = Liabilities + Owner’s Equity
= 300,000 + 500,000
= 800,000

Which of the following statement is TRUE regarding debt?

A. Debt is an ownership interest in the firm.
B. Unpaid debt can result in bankruptcy or financial failure.
C. Debt provides the voting rights to the bondholders.
D. Corporation’s payment of interest on debt is fully taxable.