Question

If total liabilities decreased by $100000 and stockholders equity decreased by $25000 during a period of time, then total assets must change by what amount and direction during that same period? $75000 increase $125000 increase $75000 decrease $125000 decrease

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Answer #1

Answer. D $125000 decrease

since, the liability side of the balance sheet decreased by $125000 ($100000+$25000)

Assets= Liabilities+Shareholders Equity

Change in liabilty side = Change in Assets side

Assets side must decreased by $125000

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