Question

If total assets increased by $190,000 during a specific period and liabilities decreased by $10,000 during the same period, the period's change in total stockholders' equity was a $200,000 increase. True False

Answer 1

True

Step-by-step explanation:

In the balance sheet, the assets, liabilities, and stockholder equity is recorded. In this the accounting equation is used which is shown below:

Total assets = Total liabilities + Stockholder equity

In the given question, the total stockholder equity would be

$190,000 = -$10,000 + stockholder equity

So, the stockholder equity would be

= $190,000 + $10,000

= $200,000

The debit and credit side of the balance sheet should always be equal and balanced.

Hence, the given statement is true