If assets increase $80,000 during a period and liabilities decrease $40,000,then owners' equity must have decreased $40,000.

Name: If assets increase $80,000 during a period and liabilities decrease $40,000,then owners' equity must have decreased $40,000.
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Quizplus · Accepted Answer

The increase in assets of $80,000 and decrease in liabilities of $40,000 means that the net increase in the total value of the company is $120,000. Therefore, if owners' equity decreased, it must have been by $120,000 and not $40,000.

If Assets Increase $80,000 During a Period and Liabilities Decrease