If Total Liabilities Decreased by $25,000 and Stockholders' Equity Increased

question 134

Multiple Choice

If total liabilities decreased by $25,000 and stockholders' equity increased by $5,000 during a period of time,then total assets must change by what amount and direction during the same time period?

• A) $20,000 increase
• B) $20,000 decrease
• C) $30,000 increase
• D) $30,000 decrease

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Definitions:

Liabilities

Financial obligations or debts that a business or individual owes to others, which must be settled over time.

Total Return

The overall financial gain or loss on an investment over a specified time period, including both capital gains and any income received.

Long-Term Growth

The process of expanding or improving a business, investment, or economic endeavor over a considerable period, aiming for sustained and stable progress.

Functional Expenses

In non-profit accounting, these are the expenses directly related to the organization's programmatic, fundraising, and administrative activities.