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6 July, 14:01

If total liabilities increase by $5,000 then

A. assets decrease by $5,000.

B. stockholders' equity increase by $5,000.

C. assets increase by $5,000, or stockholders' equity decrease by $5,000.

D. assets and stockholders' equity each increase by $2,500.

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Answers (1)
  1. 6 July, 15:22
    0
    C. assets increase by $5,000, or stockholders' equity decrease by $5,000.

    Explanation:

    Using Accounting Equation

    Asset = Equity + Liabilities

    A. - 5000 + 5000 (Equation is not balanced)

    B. + 5000 + 5000 (Equation is not balanced)

    C. + 5000 + 5000 (Equation is balanced)

    -5000 + 5000 (Equation is balanced)

    D. + 2500 + 2500 + 5000 (Equation is not balanced)
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Home » Business » If total liabilities increase by $5,000 then A. assets decrease by $5,000. B. stockholders' equity increase by $5,000. C. assets increase by $5,000, or stockholders' equity decrease by $5,000. D.
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