If total liabilities decreased by $14,000, and shareholders' equity increased by $6,000 during the same period, then the amount and direction (increase or decrease) of the period's change in total assets is a(n)
A) $20,000 increase.
B) $8,000 decrease.
C) $8,000 increase.
D) $14,000 increase.

Question

Quizplus · Accepted Answer

The accounting equation is Assets = Liabilities + Shareholders' Equity. If liabilities decrease by $14,000 and equity increases by $6,000, the net change in assets is a decrease of $8,000.

If Total Liabilities Decreased by $14,000, and Shareholders' Equity Increased