If Total Liabilities Decreased By $20,000 During A Period Of Time And Owner's Equity Increased By $40,000 During The Same Period | Fill In The Blank

Solution To The Problem

The answer of this short question or fill in the blank is that total assets increased by $20,000 as decrease in total liabilities (-$20,000) plus increased in Owner’s Equity (+$40,000) equal to increase in total assets by $20000 during the same accounting period as it is proved from Accounting Equation as shown below:

          Assets             =         Liabilities     +     Owner’s Equity

Change In Assets    =         -$20,000       +          (+$40,000)

Change / Increase In Total Assets  = $20,000 Increase

So, in simple words, we can say that if TL decreased during the period by$20,000 and Owner's Equity increased by $40,000, then there is $20,000 increase in the balance of total assets in the same period.