If a Company Has Excess Space in Its Building That

question 162

Multiple Choice

If a company has excess space in its building that it rents to another company for $700,what is the effect on the accounting equation during the first month?

• A)Assets would decrease $700 and liabilities would decrease $700.
• B)Assets would decrease $700 and equity would increase $700.
• C)Assets would increase $700 and equity would decrease $700.
• D)Assets would increase $700 and equity would increase $700.
• E)Liabilities would decrease $700 and equity would increase $700.

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Definitions:

Interest Rates

The expense levied by a lender on a borrower, shown as a percentage of the original amount, for asset usage.

Federal Budget

The government's estimate of revenue and expenditure for a specific fiscal year.

Fiscal 2009

Refers to the government's financial year 2009, which varies by country but typically encompasses a 12-month period used for accounting and budget purposes.

Laissez-faire

An economic philosophy advocating minimal government intervention in the market and the economy, allowing businesses to operate with few regulatory constraints.