If total liabilities increased by $10,000 and the assets increased by $10,000 during the accounting period, what is the change in the owner's equity amount?
A) No effect on owner's equity
B) Decrease of $10,000
C) Increase of $20,000
D) Decrease of $40,000

Question

Quizplus · Accepted Answer

The accounting equation states that Assets = Liabilities + Owner's Equity. If both assets and liabilities increase by the same amount, the owner's equity remains unchanged.

If Total Liabilities Increased by $10,000 and the Assets Increased