If Total Liabilities Decreased by $40000 and Owner's Equity Decreased

question 209

Multiple Choice

If total liabilities decreased by $40000 and owner's equity decreased by $30000 during a period of time then total assets must change by what amount and direction during that same period?

• A) $70000 decrease
• B) $10000 decrease
• C) $10000 increase
• D) $70000 increase

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Definitions:

Trading

The act of buying and selling assets, such as stocks, bonds, commodities, or currencies, in financial markets to earn a profit.

Treasury Bills

Short-term government securities issued at a discount from the par value and mature without paying interest, where the difference represents the return to the investor.

Commercial Paper

An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories, and meeting short-term liabilities.

Corporate Bonds

Long-term debt issued by private corporations typically paying semiannual coupons and returning the face value of the bond at maturity.