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Showing posts with the label If Total Liabilities Increased By $14000 During A Period Of Time And Owner's Equity Decreased By $6000 During The Same Period Then

If Total Liabilities Decreased By $25,000 During A Period Of Time And Owner's Equity Increased By $30,000 During The Same Period, Then The Amount And Direction (Increase Or Decrease) Of The Period's Change In Total Assets Is:

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Answer Of MCQ The correct answer of this multiple choice question (mcq) is (c). $5000 increase, as from Accounting Equation , decrease in total liabilities (-$25000) plus increase in owner’s equity (+$30000) equal to $5000 increase in total assets during the same accounting period as show below:       Assets            =     Liabilities      +    Owner’s Equity As, we know that the following: Change In Assets = Change In Liabilities +  Change In Owner’s Equity So, we have the following: Change / Increase In Assets  =   -$25000       +        (+$30000) Change / Increase In Assets  = +$5000 So, total assets increased to $5000 as compared to previous accounting period.
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If Total Liabilities Increased By $14,000 During A Period Of Time And Owner's Equity Decreased By $6,000 During The Same Period Then

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The correct answer is (d). $8000 increase, as from Accounting Equation , increase in total liabilities ($14000) minus decrease in Owner’s Equity ($6000) equal to $8000 increase (positive) in total assets during the same accounting period as shown below: Here, we are given: Change In Total Liabilities = +$14000 Change In Owner's Equity = -$6000 Calculate Change In Total Assets In Which Direction = ?         As we know the accounting equation:                           Assets      =       Liabilities    +    Owner’s Equity By putting the values, we have: Change / Increase In Assets  =   +$14000    +   (-$6000) Change / Increase In Assets  = $8000 Increase (Positive)
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