Certified Specialist In Pediatrics Practice Exam

If total assets decreased by $15,000 and total liabilities decreased by $5,000 during a period, what was the change in total stockholders' equity?

Increase of $20,000 Decrease of $10,000 Decrease of $20,000 Increase of $10,000

Decrease of $10,000

Using the accounting equation Assets = Liabilities + Equity: -$15,000 = -$5,000 + Equity. Solving for Equity yields a decrease of $10,000.

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