Which One of the Following Changes Describes the Receipt of $4,000

question 21

Multiple Choice

Which one of the following changes describes the receipt of $4,000 from the issuance of a long-term note payable?

• A)Assets and shareholders' equity increase by $4,000.
• B)Assets and shareholders' equity decrease by $4,000.
• C)Assets and liabilities increase by $4,000.
• D)Assets and liabilities decrease by $4,000.

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Definitions:

Creditors' Risk

The level of risk that creditors face regarding the possibility of not receiving back the principal and/or interest on loans issued to borrowers.

CPA

Certified Public Accountant, a designation given to someone who has passed the Uniform CPA Examination and met additional state education and experience requirements in accounting.

Proprietorship

A form of business organization owned by a single individual who is responsible for all its debts and entitled to all its profits.

Financial Statements

Documents that provide an overview of a company's financial condition, including the balance sheet, income statement, and cash flow statement.