If the assets of a company increase by $55,000 during the year and its liabilities increase by $25,000 during the same year,then the change in equity of the company during the year must have been:

A) An increase of $80,000.
B) A decrease of $80,000.
C) An increase of $30,000.
D) A decrease of $30,000.
E) An increase of $25,000.

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Guillermo Ramos · Accepted Answer

Final Answer : C, Explanation :  The change in equity can be calculated as the difference between the increase in assets and the increase in liabilities. In this case, the change in equity = $55,000 - $25,000 = $30,000. Therefore, the correct answer is C) An increase of $30,000.

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