True or False Question 16 of 68 concepts completed (i) True or false: If one asset increased, it must be the case that either liabilities or stockholders' equity increased by the same amount (O) True O False

**False.** In accounting, the fundamental equation is: \[ \text{Assets} = \text{Liabilities} + \text{Stockholders' Equity} \] When one asset increases, there are a few possible ways to balance the equation: 1. **Increase in Liabilities or Equity:** This would directly balance the increase in assets. 2. **Decrease in Another Asset:** Instead of increasing liabilities or equity, the increase in one asset could be offset by a decrease in another asset. **Example:** - If a company purchases equipment (an asset) by paying cash, the **Equipment** account increases while the **Cash** account decreases by the same amount. In this case, neither liabilities nor stockholders' equity are affected. Therefore, it's not mandatory for liabilities or stockholders' equity to increase when an asset increases, making the statement **False**.