If the liabilities of a company increased $74,000 during a period of time and equity in the company decreased $19,000 during the same period, what was the effect on the assets?
A)Assets would have increased $55,000.
B)Assets would have decreased $55,000.
C)Assets would have increased $19,000.
D)Assets would have decreased $19,000.
E)None of thesE.Assets = Liabilities + Stockholders' Equity

Question

Quizplus · Accepted Answer

According to the accounting equation (Assets = Liabilities + Equity), if liabilities increase by $74,000 and equity decreases by $19,000, assets must increase by $55,000 to keep the equation balanced.

If the Liabilities of a Company Increased $74,000 During a Period