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24 September, 21:23

If assets have decreased by $4,000, or stockholders' equity has increased by $4,000, then total liabilities must have A : increased by $2,000. B : increased by $4,000. C : decreased by $4,000. D : decreased by $2,000.

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  1. 24 September, 21:45
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    C : decreased by $4,000

    Explanation:

    As we know that

    The accounting equation is

    Total assets = Total liabilities + stockholder equity

    To balance the balance sheet we use the accounting equation

    That means the total assets is equal to the sum of the total liabilities and the stockholder equity

    Since in the given situation, the assets decreased by $4,000 or if the stockholder equity has increased by $4,000 so the total assets must also decreased by $4,000 itself
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