If total assets increase then a liabilities must decrease an

If total assets increase then

a) liabilities must decrease and retained earnings must increase.

b) common stock must increase and retained earnings must decrease.

c) liabilities, common stock, or retained earnings must increase.

d) liabilities, common stock, or retained earnings must decrease.

Solution

Answer: is point (c)

If total assets increase then liabilities, common stock, or retained earnings must increase.

Option C is right because when assets increase which are debit side balances then simultaneously credit balances should increase hence we selected option c which represents credit balances i.e. liabilities, common stock, or retained earnings.