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Standard XII
Mathematics
Sum of n Terms
If during the...
Question

If during the accounting period the assets increased by Rs. 7,000, and the owner's equity decreased by Rs. 3,000, then the liabilities will be ______________.

A
increased by Rs. 10,000
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B
increased by Rs. 4,000
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C
decreased by Rs. 4,000
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D
decreased by Rs. 10,000
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Solution

The correct option is A increased by Rs. 10,000
This can be summarized as through accounting equation:

Owners Equity+Liabilities= Assets
Putting the information in to the equation,

Rs. -3000+Liabilities=Rs.7000
Liabilities=Rs.7000+Rs.3000
Hence Liabilities will increase by Rs.10000

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