If Total Liabilities Increased by $18,000 and Shareholders' Equity Increased

question 20

Multiple Choice

If total liabilities increased by $18,000 and shareholders' equity increased by $21,000 during a period of time, then total assets must change by what amount and direction (increase or decrease) during that same period?

• A) $18,000 increase
• B) $21,000 increase
• C) $39,000 decrease
• D) $39,000 increase

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Definitions:

Shop Foreman

A supervisory role within a manufacturing or industrial site, overseeing the work of employees and ensuring the efficiency and quality of production.

Work-In-Process Inventory

Goods that are partially completed in the manufacturing process but not yet ready for sale.

Cost Of Goods Sold

In a perpetual inventory system, an account that records the cost of merchandise inventory used to make the sale. Also, it is the total cost of the goods which were sold to customers.

Finished Goods Inventory

Products that are completed and ready for sale but still remain in the company's inventory.