If Total Liabilities Increased by $90,000 and Stockholders' Equity Increased

question 137

Multiple Choice

If total liabilities increased by $90,000 and stockholders' equity increased by $30,000 during a period of time, then total assets must change by what amount and direction during that same period?

• A)$120,000 decrease
• B)$120,000 increase
• C)$150,000 increase
• D)$180,000 increase

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Definitions:

Option Contract

A financial derivative that provides the buyer the right, but not the obligation, to buy or sell an asset at a specified price within a specific time period.

Forward Contract

A derivative financial contract obligating the buyer to purchase an asset, or the seller to sell an asset, at a predetermined future date and price.

Swap Contract

An agreement by two parties to exchange, or swap, specified cash flows at specified intervals in the future.

Currencies

Forms of money that are issued by governments and used as a medium of exchange for goods and services in economic transactions.