The Total Liabilities of Hickory Construction Co

question 139

Multiple Choice

The total liabilities of Hickory Construction Co.decreased by $90,000 during the month of August 2022.Stockholders' equity increased by $30,000 during this period.By what amount and in what direction must total assets have changed during August?

• A)$120,000 increase
• B)$60,000 decrease
• C)$60,000 increase
• D)$90,000 decrease

---

Definitions:

Inventory Account

An accounting record that tracks the cost of goods available for sale or used in production.

Perpetual Inventory System

An accounting method that records the sale or purchase of inventory immediately through the use of computerized point-of-sale systems and enterprise asset management software.

Gross Profit

The difference between the revenue generated from selling goods or services and the cost of those goods sold, excluding other operating expenses.

Cost Of Goods Sold

The direct costs attributable to the production of goods sold by a company, including materials and labor, used in calculating gross profit.