If Total Liabilities Decreased by $30,000 and Stockholders' Equity Decreased

question 162

Multiple Choice

If total liabilities decreased by $30,000 and stockholders' equity decreased by $20,000 during a period of time, then total assets must change by what amount and direction during that same period?

• A) $50,000 decrease
• B) $10,000 decrease
• C) $10,000 increase
• D) $50,000 increase

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Definitions:

Patent Amortization

The process of gradually writing off the initial cost of a patent over its useful life, reflecting the decrease in value due to time and use.

Credit

The right side of an account.

Accumulated Amortization

The cumulative amount of amortization expense that has been recorded against an intangible asset.

Depletion

The allocation of the cost of a natural resource to expense in a rational and systematic manner over the resource’s useful life.