If total assets increased by $190,000 during a specific period and liabilities decreased by $10,000 during the same period, the period's change in total owner's equity was a $200,000 increase.

Question

Quizplus · Accepted Answer

The accounting equation is Assets = Liabilities + Owner's Equity. In this case, the increase in assets of $190,000 and the decrease in liabilities of $10,000 both contribute to an increase in owner's equity. The calculation would be:

Assets + $190,000 = Liabilities - $10,000 + Owner's Equity

Simplifying:

$190,000 - $10,000 = $180,000 increase in Owner's Equity

Therefore, the period's change in total owner's equity was a $180,000 increase.

If Total Assets Increased by $190,000 During a Specific Period