During the year,the liabilities of a company decreased by $32 034 and the assets decreased by $16 035.Consequently the shareholders' equity must have:
A) decreased by $15 999.
B) increased by $15 999.
C) increased by $48 069.
D) decreased by $48 069.

Question

Quizplus · Accepted Answer

The decrease in liabilities means the company owes $32,034 less, which would increase equity if assets remained constant. However, assets also decreased by $16,035, reducing equity. The net effect is a decrease in assets and liabilities that increases shareholders' equity by the difference ($32,034 - $16,035 = $15,999).

During the Year,the Liabilities of a Company Decreased by $32