Assuming No Other Changes Except A Decrease In Assets Of $20,000, Increase In Liabilities Of $10,000, And Expenses Of $60,000

The Correct Answer of this Multiple Choice Question (MCQ) is (A) Owners' equity increased $30,000; Revenues Were $90,000

Explanation Of This Short Question:

From Accounting Equation, we find change in Owner’s Equity and from owner’s equity formula, we find Revenues for the period (Assuming No Other Changes Take Place).

        Assets   =  Liabilities   + Owner’s Equity  -  Expenses

      -$20000  =   $10000  +  Change In Owner’s Equity   - $60000

      Change In Owner’s Equity = -$20000 - $10000 + $60000 = $30000 Increase

To calculate Revenues, we assume no other changes take place, so we have:

      Net Income = Owner’s Equity
 
      Revenues - Expenses = Owner’s Equity
 
      Revenues - $60000 = +$3000
 
      Revenues = +$30000 + $60000
 
      Revenues = $90000