The total liabilities of Hickory Construction Co.decreased by $90,000 during the month of August 2022.Stockholders' equity increased by $30,000 during this period.By what amount and in what direction must total assets have changed during August?
A)$120,000 increase
B)$60,000 decrease
C)$60,000 increase
D)$90,000 decrease

Question

Quizplus · Accepted Answer

According to the accounting equation (Assets = Liabilities + Equity), if liabilities decrease by $90,000 and equity increases by $30,000, assets must decrease by $60,000 to keep the equation balanced.

The Total Liabilities of Hickory Construction Co