Question

If total liabilities decreased by $27,137 during a period of time and owner's equity increased by $30,034 during the same period, the amount and direction (increase or decrease) of the period's change in total assets would be a___________.

Answer 1

Assets would increase by $ 2897

Step-by-step explanation:

Total Assets = Liabilities + Owner's Equity

Decrease in Liabilities = $ 27,137

Increase in Owner's Equity = $ 30,034

Total Change =$ 30,034 - $ 27,137= $ 2897

As the assets must equal the liabilities and owner's equity so the total change in liabilities and owner's equity must equal the change in assets.

In the above question the liabilities and owner's equity in total increase by $ 2897 so the assets must increase by $ 2897.