If total liabilities decreased by $90,000 and stockholders' equity increased by $30,000 during a period of time, then total assets must change by what amount and direction during that same period?
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 + Stockholders' Equity), if liabilities decrease by $90,000 and stockholders' equity increases by $30,000, the net effect is a $60,000 decrease in total assets.

If Total Liabilities Decreased by $90,000 and Stockholders' Equity Increased