If liabilities increase by $10,000 during a given period and stockholders' equity decreases by $6,000 during the same period,assets must have
A)increased by $16,000.
B)increased by $4,000.
C)decreased by $4,000.
D)decreased by $16,000.
E)This cannot be determined with the given information.

Question

Quizplus · Accepted Answer

The increase in liabilities (a decrease in assets) of $10,000 and a decrease in stockholders' equity of $6,000 must be balanced by an increase in assets of $4,000 ($10,000 - $6,000). Therefore, assets increased by $4,000.

If Liabilities Increase by $10,000 During a Given Period and Stockholders