whats does it mean when a companys overall assets increased, while the liabilities increase and equity...

whats does it mean when a companys overall assets increased, while the liabilities increase and equity deacreases over the period 2019-2019

Expert Solution

Any company's assets will either funded by debt(Liabilities) or equity(shareholders funds). If assets are increasing and Liabilities too increasing that means the assets are building up by taking debt. This led to increase in Liabilities and fall in the equity proportion.

jeff jeffy answered 2 years ago

For each transaction, indicate whether the balance of total assets, liabilities and owner’s equity (OE) increased,...

For each transaction, indicate whether the balance of total assets, liabilities and owner’s equity (OE) increased, decreased, or did not change. Transaction # Description Assets Liabilities Owner’s Equity 1 Paid salaries for current month. AnswerDecreaseIncreaseNo Change AnswerDecreaseIncreaseNo Change AnswerDecreaseIncreaseNo Change 2 Purchased equipment on credit. AnswerDecreaseIncreaseNo Change AnswerDecreaseIncreaseNo Change AnswerDecreaseIncreaseNo Change 3 Purchased furniture using cash. AnswerDecreaseIncreaseNo Change AnswerDecreaseIncreaseNo Change AnswerDecreaseIncreaseNo Change 4 Additional investment into the business. AnswerDecreaseIncreaseNo Change AnswerDecreaseIncreaseNo Change AnswerDecreaseIncreaseNo Change 5 Received immediate payment for services...

The assets of Lee’s business increased by $40,000 and the liabilities increased by $5,000 during the...

The assets of Lee’s business increased by $40,000 and the liabilities increased by $5,000 during the current year. If the profit for this period was $25,000, what additional contribution or withdrawal was made by the owner? (Assume only a withdrawal or a contribution was made). Select one: a. Contribution $5,000 b. Drawings $5,000 c. Drawings $10,000 d. Contribution $10,000

1). Credits a) decrease both assets and liabilities. b) decrease assets and increase liabilities. c) increase...

1). Credits a) decrease both assets and liabilities. b) decrease assets and increase liabilities. c) increase both assets and liabilities. d) increase assets and decrease liabilities. 2). The normal balance of an account is the a) left side. b) right side. c) side which increases that account. d) side that decreases that account. 3). The double-entry system requires that each transaction must be recorded a) in at least two different accounts. b) in two sets of books. c) in a...

1). Credits a) decrease both assets and liabilities. b) decrease assets and increase liabilities. c) increase...

1). Credits a) decrease both assets and liabilities. b) decrease assets and increase liabilities. c) increase both assets and liabilities. d) increase assets and decrease liabilities. 2). The normal balance of an account is the a) left side. b) right side. c) side which increases that account. d) side that decreases that account. 3). The double-entry system requires that each transaction must be recorded a) in at least two different accounts. b) in two sets of books. c) in a...

The current conceptual distinction between liabilities and equity defines liabilities independently of assets and equity, with...

The current conceptual distinction between liabilities and equity defines liabilities independently of assets and equity, with equity defined as a residual amount. The present proliferation of financial instruments that combine features of both debt and equity and the difficulty of drawing a distinction have led many to conclude that the present two-category distinction between liabilities and equity should be eliminated. Two opposing viewpoints are: View #1: The distinction should be maintained. View #2: The distinction should be eliminated, and financial...

Debits: a. Decrease both assets and liabilities. b. Increase assets and decrease liabilities. c. Decrease assets...

Debits: a. Decrease both assets and liabilities. b. Increase assets and decrease liabilities. c. Decrease assets and increase liabilities. d. Increase both assets and liabilities.

1. If total liabilities increased by $100,000 and stockholders’ equity increased by $30,000 during a period...

1. If total liabilities increased by $100,000 and stockholders’ equity increased by $30,000 during a period of time, then total assets must change by what amount and direction during that same period? Question 1 options: $100,000 increase $130,000 decrease $30,000 decrease $130,000 increase 2. Meat and Liquor Corp. has five plants nationwide that cost $400 million to build. The current fair market value of the plants is $550 million. The plants are listed for sale at $600 million. The plants...

define balance sheet assets liabilities equity

define balance sheetassetsliabilitiesequity

Create a balance sheet (assets, liabilities, equity, liabilities + equity) for Tech Co using the following...

Create a balance sheet (assets, liabilities, equity, liabilities + equity) for Tech Co using the following information: Adjusted Trial Balance As of December 31, 2014 Debits Credits Cash 278,554,562 Accounts Receivable 128,102,723 Allowance for Doubtful Accounts 5,764,623 Inventory 1,438,773,206 Merchandise Purchases 2,363,146,864 Buildings 198,895,751 Accumulated Depreciation - Building 84,843,130 Equipment 104,891,998 Accumulated Depreciation - Equipment 42,768,575 Trademark 80,000 Accounts Payable 1,243,547,398 Interest Payable 2,258,179 Taxes Payable 9,015,728 Notes Payable 160,391,997 Bonds Payable 200,000 Premium on Bonds Payable 3,600 Dividends Payable...

1. The balance sheet consists of assets and liabilities and equity. With a focus on liabilities,...

1. The balance sheet consists of assets and liabilities and equity. With a focus on liabilities, discuss the connectedness of these three components. 2. Discuss the components needed to determine the present value of a noncurrent liability. 3. Discuss the relationship between the income statement and the shareholders' equity section of the balance sheet. 4. Discuss the purpose of other comprehensive income and accumulated other comprehensive income. 5. Compare and contrast book value per share and market capitalization. 6. Evaluate...

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whats does it mean when a companys overall assets increased, while the liabilities increase and equity...

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For each transaction, indicate whether the balance of total assets, liabilities and owner’s equity (OE) increased,...

The assets of Lee’s business increased by $40,000 and the liabilities increased by $5,000 during the...

1). Credits a) decrease both assets and liabilities. b) decrease assets and increase liabilities. c) increase...

1). Credits a) decrease both assets and liabilities. b) decrease assets and increase liabilities. c) increase...

The current conceptual distinction between liabilities and equity defines liabilities independently of assets and equity, with...

Debits: a. Decrease both assets and liabilities. b. Increase assets and decrease liabilities. c. Decrease assets...

1. If total liabilities increased by $100,000 and stockholders’ equity increased by $30,000 during a period...

define balance sheet assets liabilities equity

Create a balance sheet (assets, liabilities, equity, liabilities + equity) for Tech Co using the following...

1. The balance sheet consists of assets and liabilities and equity. With a focus on liabilities,...