Question

If total assets decreased by $49,928 during a period of time and stockholders' equity increased by $26,024 during the same period, then the amount and direction (increase or decrease) of the period's change in total liabilities is a.$21,578 increase b.$49,928 decrease c.$75,952 increase d.$75,952 decrease

Answer 1

Answer:

d.$75,952 decrease

Explanation:

We simply use the Accounting Equation to determine the period's change in total liabilities.

So, the Accounting Equation states :

Assets = Equity + Liabilities

also

Assets - Equity = Liabilities

therefore,

($49,928) - $26,024 =  Liabilities

(- $75,952) = Liabilities

conclusion

The period's change in total liabilities is $75,952 decrease