The Payment of Employee Salaries Has What Effect on the Accounting

question 72

Multiple Choice

The payment of employee salaries has what effect on the accounting equation?

• A)assets and stockholders' equity decrease
• B)liabilities and stockholders' equity decrease
• C)assets decrease and liabilities increase
• D)assets increase and liabilities decrease

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Definitions:

Real Rate

The interest rate adjusted for inflation, reflecting the true cost of borrowing.

Inflation Rate

The rate that reflects how the overall prices of services and goods escalate, causing a reduction in the capacity to purchase.

Treasury Bill

A short-term government security with a maturity of less than one year, sold at a discount to face value to provide a return to the holder upon maturity.

Coupon Bonds

Debt securities that pay periodic interest payments based on a fixed interest rate (coupon) until maturity, at which point the principal is repaid.