If total liabilities increased by $15,000 and shareholders' equity increased by $15,000 during a period of time, then total assets must change by what amount and direction (increase or decrease) during that same period?
A)$15,000 decrease
B)$15,000 increase
C)$30,000 decrease
D)$30,000 increase

Question

Quizplus · Accepted Answer

The accounting equation is Assets = Liabilities + Shareholders' Equity. If total liabilities increased by $15,000 and shareholders' equity increased by $15,000, this means that there was no change to the assets since both sides of the equation increased by the same amount. Therefore, there is no change to the total assets during that same period.

If Total Liabilities Increased by $15,000 and Shareholders' Equity Increased