If total assets increase by Rs 40,000 and total liabilities increase by Rs 10,000, what is the effect on the owner's equity?
A. Decreases by Rs 30,000
B. Decreases by Rs 40,000
C. Increases by Rs 50,000
D. Increases by Rs 30,000
Answer: Option D
Solution (By JKSSB Mock Tests)
Since Assets = Liabilities + Equity, 40,000 (Increase) = 10,000 (Increase) + Equity (Increase). Equity must increase by Rs 30,000.
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