Question

If total liabilities is decreased by Rs. 20000 and stockholders equity increased by Rs5000 during a period of time, then total asstes must change by what amount and direction during that same time period: i.15000 increase ii.15000 dec iii.25000 inc iv.25000 dec

Answer 1

option (ii) is correct..

Answer 2

if the liabilities decreased by 20000 and this means there is a positive change on the debit side by 20000, when the stockholders increases by 5000 it means that there is a positive change on the debit side by 5000 shillings this gives a total  positive change of 25000 on the the debit side increasing assets by 25000