If total liabilities decreased by $46,000 during a period of time and stockholder's equity increased by $60,000 during the same period,the amount and direction increase or decrease of the period's change in total assets is
A)$106,000 increase
B)$14,000 increase
C)$14,000 decrease
D)$106,000 decrease

Question

Quizplus · Accepted Answer

The total change in assets can be calculated using the accounting equation: Assets = Liabilities + Stockholders' Equity. 
If liabilities decreased by $46,000 and stockholders' equity increased by $60,000, then the total change in assets would be: 
Assets = Liabilities + Stockholders' Equity 
Assets = ($46,000 decrease) + ($60,000 increase) 
Assets = $14,000 increase

If Total Liabilities Decreased by $46,000 During a Period of Time