If Total Assets Decreased By $88,000 During A Period Of Time And Owner's Equity Increased By $65,000 During The Same Period, Then...
The correct answer of this multiple choice question (mcq) is (d) i.e., $153000 decrease in total liabilities, as decrease in total assets (-$88,000) minus increase in owner’s equity (+$65,000) equal to $153,000 decrease in total liabilities during the same time period. To prove it, we use the following Accounting Equation for the calculation of amount and direction in total liabilities as shown below: Assets = Liabilities + Owner’s Equity -$88,000 = Change In Liabilities + (+$65,000) Change / Decrease In Total Liabilities = -$88,000 - $65,000 = $153,000 decrease Therefore, all the options like a, b and c are wrong choices here.