During the current year, liabilities of Corbett's Store increased by $220,000, and equity increased by $160,000 then
A) Assets at the end of the year total $380,000.
B) Assets at the end of the year total $60,000.
C) Assets increased during the year by $380,000.
D) Assets decreased during the year by $60,000.

Question

Quizplus · Accepted Answer

According to the accounting equation, Assets = Liabilities + Equity. If liabilities increased by $220,000 and equity increased by $160,000, then assets must have increased by the same amount ($220,000 + $160,000 = $380,000). Therefore, the correct answer is C, Assets increased during the year by $380,000.

During the Current Year, Liabilities of Corbett's Store Increased by $220,000