Final answer:
The correct change reflecting the provided information in the accounting equation is 'Assets increase by K25000, Liabilities increase by K5000', which matches the given values and maintains the balance in the equation.
Step-by-step explanation:
The student asks about the changes in the accounting equation given the proprietorship, assets, and liabilities of a business. The accounting equation is Assets = Liabilities + Owner's Equity (or Proprietorship). If we examine the provided information, we can deduce the following:
- Proprietorship (Owner's Equity) is K20000.
- Assets are K25000.
- Liabilities are K5000.
To satisfy the accounting equation, Assets (K25000) must equal the sum of Liabilities (K5000) and Proprietorship (K20000).
Let's look at the given options:
- a. Assets increase by K25000, Liabilities increase by K5000. This matches with the increase in assets and liabilities as stated in the problem and maintains the balance in the accounting equation.
- b. Assets increase by K20000, Liabilities increase by K5000. This does not match the given asset amount.
- c. Liabilities decrease by K5000, Proprietorship increases by K20000. This does not resume any change in assets and does not match the given condition.
- d. Proprietorship increases by K25000, Assets increase by K5000. This also does not match the given conditions in the problem.
Therefore, the correct option that reflects the changes in the accounting equation is:
a. Assets increase by K25000, Liabilities increase by K5000.