[amp_mcq option1=”Excessive liabilities” option2=”Excessive turnover” option3=”Excess value of liabilities over assets” option4=”Excess value of assets over liabilities” correct=”option4″]
The correct answer is D. Excess value of assets over liabilities.
Surplus is the excess of the value of an entity’s assets over the value of its liabilities. It is also known as net worth, equity, or book value. Surplus can be used to finance new investments, pay dividends to shareholders, or repay debt.
Option A is incorrect because excessive liabilities would lead to a deficit, not a surplus.
Option B is incorrect because excessive turnover is not a measure of value.
Option C is incorrect because the value of liabilities cannot be greater than the value of assets.