A Company Borrows $2 Million from Its Bank

question 125

Multiple Choice

A company borrows $2 million from its bank. It then uses this money to buy equipment. How does this transaction affect the accounting equation?

• A) Assets and Liabilities both rise $2 million.
• B) Assets and Stockholders' Equity both fall $2 million.
• C) Assets, Liabilities, and Stockholders' Equity are unchanged.
• D) Stockholders' Equity rises $2 million and Liabilities fall $2 million.

Critically evaluate the needs and motivations influencing human behavior and personal fulfillment.

Understand the different sources of power within an organization and the context in which they are most effective.

Recognize the impact of organizational structure on decision-making authority and ethical behavior.

Identify and analyze the role of group norms, organizational culture, and ethical culture in influencing employee behavior and organizational performance.

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Definitions:

Self-Interest

The pursuit of personal gain or advantage, often considered in the context of how it influences human behavior and decision-making.

Utility

In ethics and economics, the concept of creating the greatest happiness or benefit for the greatest number of people.

Pluralists

Advocates of a system in which power is distributed among various groups and organizations, ensuring no single entity dominates.

Relativists

Individuals who hold that moral principles are not absolute but instead vary with social or individual circumstances.