If total liabilities decreased by $30,000 and stockholders' equity decreased by $10,000 during a period of time, then total assets must change by what amount and direction during that same period?

(A) $40,000 increase

(B) $20,000 decrease

(C) $40,000 decrease

(D) $20,000 increase

Question

Business

Jason Dawson

17 July, 06:24

If total liabilities decreased by $30,000 and stockholders' equity decreased by $10,000 during a period of time, then total assets must change by what amount and direction during that same period?

(A) $40,000 increase

(B) $20,000 decrease

(C) $40,000 decrease

(D) $20,000 increase

+1

Answers (1)

Know the Answer?

Mikaela Simmons · Answer 1

C) $40.000 Decrease

Explanation:

The accounting equation states that: Assets = Liabilities + Equity, so in this case the Assets must decrease in the same amount that change the other side of the equation, $40.000.

If total liabilities decreased by $30,000 and stockholders' equity decreased by $10,000 during a period of time, then total assets must change by what amount and direction during that same period?(A) $40,000 increase(B) $20,000 decrease(C) $40,000 decrease(D) $20,000 increase

If total liabilities decreased by $30,000 and stockholders' equity decreased by $10,000 during a period of time, then total assets must change by what amount and direction during that same period?

(A) $40,000 increase

(B) $20,000 decrease

(C) $40,000 decrease

(D) $20,000 increase