Question

If the liabilities of a business increased $75,000 during a period of time and the equity in the business decreased $30,000 during the same period, the assets of the business must have:

Answer 1

Answer:

Increased $45,000

Explanation:

Calculation for what the assets of the business must have

Using this formula

Change in Assets = Change in Liabilities + Change in Owner's Equity

Where,

Change in Liabilities =$75,000

Change in Owner's Equity=$30,000

Let plug in the formula

Change in Assets = $75,000 + ($30,000)

Change in Assets= $45,000 Increased

Therefore what the assets of the business must have will be $45,000 Increased