What Is the Effect on the Balance Sheet When the Business

question 61

Multiple Choice

What is the effect on the balance sheet when the business buys inventory on credit?

• A) increase asset inventory; increase liability creditor
• B) decrease asset inventory; increase liability creditor
• C) decrease asset inventory; decrease liability creditor
• D) increase asset inventory; increase equity

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Definitions:

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Economic Necessity

The requirement of economic resources or actions to satisfy basic needs or preserve financial stability.

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A group of English Protestants in the 16th and 17th centuries who sought to purify the Church of England from its Catholic practices.

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