Gomez Service Company Paid Its First Installment on a Note

question 38

Multiple Choice

Gomez Service Company paid its first installment on a note payable of $2,000. How will this transaction affect the accounting equation?

• A) increase in liabilities (Notes Payable) and decrease in assets (Cash)
• B) decrease in assets (Cash) and decrease in owner's equity (Note Payable Expense)
• C) decrease in assets (Cash) and decrease in assets (Notes Receivable)
• D) decrease in assets (Cash) and decrease in liabilities (Notes Payable)

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Definitions:

Associating New Items

The cognitive process of linking new information with existing knowledge.

Autobiographical Memory

The aspect of memory that involves the recollection of personal experiences and events from one's own life.

Family Stories

Narratives shared within a family that recount significant events, relationships, or history of the family members.

Unconscious Memories

Memories that are not within one's conscious awareness, often influencing behaviors and decisions without one's realization.