If an individual asset is increased, then
A) there must be an equal decrease in a specific liability.
B) there must be an equal decrease in owner's equity.
C) there must be an equal decrease in another asset.
D) none of these is possible.

Question

Quizplus · Accepted Answer

If an individual asset is increased, then there must be an equal decrease in another asset. This is known as the "conservation of assets" principle in accounting. The total assets of a business remain the same, but the composition or allocation of those assets can change. For example, if a company purchases a new delivery truck (increasing the "vehicles" asset account), but then sells an old delivery truck (decreasing the "vehicles" asset account), the total assets of the company do not change.

If an Individual Asset Is Increased, Then