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goblinko [34]
3 years ago
15

When preparing the balance sheet, you noticed that total liabilities have decreased by

Business
1 answer:
EleoNora [17]3 years ago
5 0

Answer:

) $40,000 increase

Explanation:

A balance sheet shows the value and financing of a company's assets at the end of a period. It as prepared following the accounting equation of Assets = Equity + liabilities.

A decrease or increase in assets ( left side of the equation ) follows a similar increase or decrease in the right to balance the equation.

In this case, liabilities and equity have increased by $25,000 and $15,000

=$40,000

Liabilities and equity are both on the right side and have increased by $40,000; assets must have increased by $40,000.

An increase of $40,000

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dimaraw [331]
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