Question

"If the liabilities of a business increased $91,000 during a period of time and the owner's equity in the business decreased $38,000 during the same period, the assets of the business must have:"

Answer 1

Answer:

Assets = $ 53,000 increased

Explanation:

Given Data;

Increased liability = $91,000

Decreased owner's equity = $38,000

assets  = ?

The formula for Assets is given as;

Assets = Liabilities + Owner's Equity

But change in assets = Change in Liabilities + Change in Owner's Equity

from the question,  there is increased in liability and decreased in owner's equity.

Therefore,

Change in assets = increase of $91,000 + decreased of $38,000

                              =$ 53,000 increased