If during the current year,liabilities of Hayden Travel decreased by $50,000 and owners' equity increased by $75,000,then:
A)Assets at the end of the year total $125,000.
B)Assets at the end of the year total $25,000.
C)Assets increased during the year by $25,000.
D)Assets decreased during the year by $125,000.

Question

Quizplus · Accepted Answer

By the accounting equation, Assets = Liabilities + Owners' Equity. If liabilities decreased by $50,000 and owners' equity increased by $75,000, then there must have been a net increase of $25,000 in assets during the year. Therefore, the correct choice is C.

If During the Current Year,liabilities of Hayden Travel Decreased by $50,000