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:

Predetermined Overhead

An estimated overhead cost rate used to allocate overhead costs to products or services based on a planned activity level.

Direct Labour Cost

This refers to the total earnings (wages, salaries, benefits) paid to employees directly involved in the production of goods or services.

Sporting Equipment

Items and gear used in sports and physical activities to enhance performance or ensure safety.

Direct Materials

The raw materials that are directly used in the manufacturing of a product and can be easily traced to it.