If the Liabilities of a Company Increased $74,000 During a Period

question 69

Multiple Choice

If the liabilities of a company increased $74,000 during a period of time and equity in the company decreased $19,000 during the same period, what was the effect on the assets?

• A) Assets would have increased $55,000.
• B) Assets would have decreased $55,000.
• C) Assets would have increased $19,000.
• D) Assets would have decreased $19,000.
• E) None of these.

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Definitions:

Income Tax Expense

The cost associated with taxes on earnings, calculated based on the applicable tax rates and laws.

Comparative Balance Sheet

A financial statement that presents the financial position of a company at two or more different points in time, allowing for comparison and analysis of changes.

Balance Sheet Accounts

Accounts reported in the balance sheet, including assets, liabilities, and shareholders' equity.

Bonds Payable

Long-term liabilities representing borrowed money that the company is obligated to repay, typically with interest, at a specified future date.