If total liabilities increased by $25,000 during a period of time and stockholders' equity decreased by $9,000 during the same period, then the amount and direction (increase or decrease) of the period's change in total assets is a(n)

Question

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According to the accounting equation (Assets = Liabilities + Equity), if liabilities increase by $25,000 and equity decreases by $9,000, the net effect on assets is an increase of $16,000 ($25,000 - $9,000).

If Total Liabilities Increased by $25,000 During a Period of Time