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The beginning balance in total assets is $100,000 and total liability $30,000. The ending balance in total assets is $110,000 and total liability $50,000. Which of the following is possible?

 
 
 
 
 
 

Correct answer. Per “A=L+OE”, OE=A-L. The ending balance in OE = The beginning balance in OE + the increase in OE – the decrease in OE. Net income is an increase in OE while dividends paid is a decrease in OE.

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