The Purchase of an Asset on Credit

question 129

Multiple Choice

The purchase of an asset on credit

• A)increases assets and shareholders' equity.
• B)increases assets and liabilities.
• C)decreases assets and increases liabilities.
• D)has no effect on total assets.

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Definitions:

Frustration

Interference with a contract by some outside, unforeseen event that makes performance impossible or essentially different in nature.

Equitable Remedy

A judicial order enforcing a party to act or refrain from acting in a certain way, used when monetary compensation does not suffice to resolve a legal dispute.

Frustration Clause

A frustration clause in a contract is a provision that releases both parties from their obligations if an unforeseeable event occurs, making it impossible to fulfill the contract.

Tomato Crop

Refers to the cultivation and production of tomatoes as an agricultural activity.