Which of the Following Business Transactions Would Increase the Equity

question 195

Multiple Choice

Which of the following business transactions would increase the equity of ABC Limited?

• A) ABC received a $1,200 cash payment on account from a customer.
• B) ABC Limited's owner withdrew $900 cash to cover personal living expenses.
• C) ABC purchased a new machine for $45,000 on account.
• D) ABC billed a customer $14,800 for consulting services provided during the month.
• E) ABC purchased a building for $100,000 on account.

---

Definitions:

Future Value

The value of an investment or cash flow at a specific future date, adjusted for time value of money and interest.

Discount Rate

The interest rate used to discount future cash flows to their present value, often reflecting the cost of capital or the risk of the investment.

Present Value

The present evaluation of a future cash sum or series of cash receipts, factoring in a certain rate of return for discounting.