If Total Liabilities Increased By $20000 During A Period Of Time And Owner's Equity Increased By $5000 During The Same Period, The Amount And Direction (Increase Or Decrease) Of The Period's Change In Total Assets Is:

The correct answer is (c). $25000 increase, as increase in total liabilities by $20000 plus increase in Owners’ Equity by $5000 during the same period equal to $25000 increase in total assets as shown from below Accounting Equation:

            Assets                     =     Liabilities    +   Owner’s Equity

As, we know:

Change In Total Assets = Change In Total Liabilities + Total Owner’s Equity

So, we have the following results as shown below:

Change In Total Assets    =      +$25000     +   (+$5000)
 
Change / Increase In Total Assets = $25000 Increase