When a Firm Borrows Money, One Effect on the Accounting

question 91

Multiple Choice

When a firm borrows money, one effect on the accounting equation is a(n)

• A)decrease in contributed capital.
• B)increase in assets.
• C)decrease in liabilities.
• D)decrease in assets.

Identify strategies for goal achievement and self-discipline’s role in academic and personal success.

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Definitions:

Working Capital

The measure of a company's short-term financial health and operational efficiency, calculated as current assets minus current liabilities.

External Financing

The process of obtaining capital from outside sources, such as banks, investors, or financial markets to fund operations, growth, and expansion projects.

Cash Sooner

A financial strategy aimed at accelerating cash inflows or reducing the time it takes to receive payments or revenues.

Fund-Raising Strategy

A planned approach to generating financial support for a project or organization, often involving various funding sources and methods.