Question

An increase in total assets: means that net working capital is also increasing. requires an investment in fixed assets. means that stockholders' equity must also increase. must be offset by an equal increase in liabilities and stockholders' equity. can only occur when a firm has positive net income.

Answer 1

Must be offset by an equal increase in liabilities and stockholders' equity

Step-by-step explanation:

Accounting Equation is stated as :

Asset = Equity + Liabilities

thus

The Left Hand Side must always equal the Right Hand Side.

therefore,

An increase in total assets: must be offset by an equal increase in liabilities and stockholders' equity.