If total liabilities decreased by $30,000 and stockholders' equity increased by $20,000 during a period of time, then total assets must change by what amount and direction during that same period?
A) $50,000 decrease
B) $10,000 decrease
C) $10,000 increase
D) $50,000 increase

Question

Quizplus · Accepted Answer

According to the accounting equation (Assets = Liabilities + Equity), if liabilities decrease by $30,000 and equity increases by $20,000, assets must decrease by $10,000 to keep the equation balanced.

If Total Liabilities Decreased by $30,000 and Stockholders' Equity Increased