If total liabilities increased by $10,000 and the assets increased by $10,000 during the accounting period, what is the change in the owner's equity amount?

A) No effect on owner's equity
B) Decrease of $10,000
C) Increase of $20,000
D) Decrease of $40,000

Owner's Equity

The total value of assets owned by the proprietorship after all debts and liabilities have been settled; essentially the net worth of a company.

Liabilities

Financial obligations or debts owed by a business to others, which must be settled over time through the transfer of economic benefits including money, goods, or services.

Assets

Assets are possessions or property that a company owns or controls, anticipated to yield benefits in the future.