If total assets increase, then either liabilities or stockholders' equity also must increase.

Name: If total assets increase, then either liabilities or stockholders' equity also must increase.
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Question

Quizplus · Accepted Answer

This statement is based on the accounting equation, which states that Assets = Liabilities + Stockholders' Equity. If assets increase, either liabilities or stockholders' equity (or both) must increase in order to balance the equation.

If Total Assets Increase, Then Either Liabilities or Stockholders' Equity