Question

Quiz Active TI 1 2 3 Over the period of a year, Julie's net worth decreased. Which of the following could be true? Julie's assets and liabilities decreased by the same amount. b. Julie's assets and liabilities increased by the same amount. c. Julie's assets increased by more than her liabilities. d. Julie's assets decreased by more than her liabilities. Please select the best answer from the choices provided O A О В OC​

Answer 1

Julie's net worth decreased over the year because her assets decreased by more than her liabilities, which reduced her overall net worth.

Step-by-step explanation:

Over the period of a year, Julie's net worth decreased. The possible scenario that could be true is that Julie's assets decreased by more than her liabilities (d). A T-account separates a firm's assets on the left from its liabilities on the right, with assets equalling liabilities plus net worth. Because net worth is the total assets minus total liabilities, for net worth to decrease while assets and liabilities change, assets must have decreased more than liabilities, leading to a reduction in net worth.