If Total Liabilities Decreased By $75,000 And Stockholders' Equity Increased By $15,000 During A Period Of Time, Then Total Assets Must Change By What Amount And Direction During That Same Period? | MCQ Answer
The correct answer is (A) $60000 Decrease, as decrease in total liabilities by $75000 plus (+) increase in stockholders’ equity by $15000 equal to $60000 Decrease in total assets during the same accounting period as it is proved from below Accounting Equation : Assets = Liabilities + Stockholders’ Equity Change In Total Assets = -$75000 + (+$15000) Change / Decrease in Total Assets = -$75000 + $15000 As We Know: (-$75000 + $15000 = $60000) Change / Decrease in Total Assets = $60,000 Decrease So, we can say that total assets decreased by $60,000 in opposite direction during the same accounting period.