Question

If total liabilities increased by $69,000 during a period of time and stockholders’ equity decreased by $27,000 during the same period, then the amount and direction (increase or decrease) of the periods change in total assets is a(n):

Answer 1

An increase in Total Assets by 42.000.

Step-by-step explanation:

You have to keep in mind that the accounting equation must be always valid:

Total Assets = Total Liabilities + Equity

??????????? = + 69.000 + (-27.000)

The difference must be reflected in the Total Assets, which is an increase of +42.000, in this case we keep the equation validity.