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 Given: Change In Total Liabilities = +$20000, Change In Owner's Equity = +$5000 Find: Change In Total Assets = ? 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