contestada

If the liabilities of a company increased $74,000 during a period of time and equity in the company decreased $19,000 during the same period, what was the effect on the assets?
A. Assets would have increased $55,000.
B. Assets would have decreased $55,000.
C. Assets would have increased $19,000.
D. Assets would have decreased $19,000.
E. None of these.

Respuesta :

Answer:

A. Assets would have increased $55,000.

Explanation:

The computation of the effect on the asset is shown below:

As we know that

Accounting equation equals to

Total assets = Total liabilities + Shareholder equity

where,

Total liabilities increases by $74,000

And, the shareholder equity is decreased by $19,000

Total assets = $74,000 - $19,000

Total assets = $55,000 increase

Otras preguntas