If total liabilities decreased by $15,000 and owner's equity increased by $5,000 during a period of time, then total assets must change by what amount and direction during that same period?
A) $20,000 increase
B) $10,000 decrease
C) $10,000 increase
D) $15,000 decrease

Question

Quizplus · Accepted Answer

According to the accounting equation (Assets = Liabilities + Owner's Equity), if liabilities decrease by $15,000 and owner's equity increases by $5,000, then assets must decrease by $10,000 to keep the equation balanced.

If Total Liabilities Decreased by $15,000 and Owner's Equity Increased