(Learning Objective 1: Defi ning key accounting terms) Accounting defi nitions are precise, and you must understand the vocabulary to properly use accounting. Sharpen your understanding of key terms by answering the following questions:

1.

How do the assets and owners’ equity of Volkswagen Corporation differ from each other? Which one (assets or owners’ equity) must be at least as large as the other? Which one can be smaller than the other?

2.

How are Volkswagen’s liabilities and owners’ equity similar? Different?