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15 March, 12:40

If total liabilities decreased by $30,000 and stockholders' equity decreased by $10,000 during a period of time, then total assets must change by what amount and direction during that same period?

(A) $40,000 increase

(B) $20,000 decrease

(C) $40,000 decrease

(D) $20,000 increase

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Answers (1)
  1. 15 March, 13:03
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    C) $40.000 Decrease

    Explanation:

    The accounting equation states that: Assets = Liabilities + Equity, so in this case the Assets must decrease in the same amount that change the other side of the equation, $40.000.
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