Answered: If a companys assets decreased $50,000…

If a companys assets decreased $50,000 and it's liabilites decreased $90,000, how much does the stockholders equity increase or decrease? Please explain why as well. Thank you!

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter10: Stockholder's Equity

Section: Chapter Questions

Problem 12MCQ

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Question

If a companys assets decreased $50,000 and it's liabilites decreased $90,000, how much does the stockholders equity increase or decrease? Please explain why as well. Thank you!

Definition Definition Assets available to stockholders after a company's liabilities are paid off. Stockholders’ equity is also sometimes referred to as owner's equity. A stockholders’ equity or book value generally includes common stock, preferred stock, and retained earnings and is an indicator of a company's financial strength.

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