When a Company Borrows Money from the Bank, Which Type

question 21

Multiple Choice

When a company borrows money from the bank, which type of account(s) is(are) increased?

• A)asset account only
• B)retained earnings only
• C)liability account only
• D)both asset and liability accounts

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Definitions:

Delivery Date

The specific date on which a financial transaction, typically involving commodities or currencies, is set to be completed.

Commodity

A basic good used in commerce that is interchangeable with other goods of the same type.

Dividend-Paying Assets

Investments like stocks that provide a return to investors in the form of dividends, or periodic payments from the company's earnings.

Spot-Futures Parity

A theoretical pricing model that suggests the relationship between the spot price of an asset and its corresponding futures price, based on the cost of carry.