Giff Services Company Experienced Some Difficulties with Cash Flow So

question 87

Multiple Choice

Giff Services Company experienced some difficulties with cash flow so it approached one of its vendors about a payment extension. The vendor agreed to the extension on the condition that the company sign a note that includes 9% interest. What is the impact on the accounting equation of recording a note payable in exchange for the account payable?

• A)Both assets and liabilities increase.
• B)Both assets and liabilities decrease.
• C)Liabilities increase and stockholders' equity decreases.
• D)There is no net impact, as there are corresponding increases and decreases in liability accounts.

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Definitions:

Deforestation

The removal of trees and forests, typically for agriculture or urban development.

Biodiversity

The variety of life in the world or in a particular habitat or ecosystem, indicating the health and resilience of biological systems.

Water Supplies

The availability of water resources to meet the consumption needs of individuals, communities, and ecosystems.

National Parks

Designated natural areas protected for public enjoyment and preservation of wildlife, usually operated by national governments.