Accounting?

If the Asset decease by 20000, and the Liabilities decrease by 25000, what will the Owner’s Equity be?

Top 2 Answers

A few days ago

Favorite Answer

The basic accounting equations is

ASSETS = LIBILITIES + EQUITY

So, if you decrease the left side of the equation by 20K, the right side must also decrease overall by 20K. The simplest change would be for liabilities or equity to decrease by the same 20K. But that didn’t happen here.

Since liabilities decreased by 25K (or 5K too much), the equity term must balance this out. The only way to make this happen is for equity to have increased. So speaking only in terms of what changed;

-20 = -25 + 5

Thus, Owner’s Equity increased by 5000.

A few days ago

lo patisse

increased by 5,000 because assets = liabilites+owner’s equity so (20,000)=(25000)+5000

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Accounting?

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