If total liabilities increased by $69,000 during a period of time and stockholders' equity decreased by $27,000 during the same period, then the amount and direction (increase or decrease) of the periods change in total assets is a (n) :

Question

Joslyn

Business

1 November, 08:50

If total liabilities increased by $69,000 during a period of time and stockholders' equity decreased by $27,000 during the same period, then the amount and direction (increase or decrease) of the periods change in total assets is a (n) :

+1

Answers (1)

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King Parsons · Answer 1

An increase in Total Assets by 42.000.

Explanation:

You have to keep in mind that the accounting equation must be always valid:

Total Assets = Total Liabilities + Equity

? = + 69.000 + (-27.000)

The difference must be reflected in the Total Assets, which is an increase of + 42.000, in this case we keep the equation validity.