One Effect on the Accounting Equation When a Firm Lends

question 141

Multiple Choice

One effect on the accounting equation when a firm lends money is

• A) stockholders' equity decreases.
• B) liabilities decrease.
• C) liabilities increase.
• D) total assets remain the same.

---

Definitions:

Venn Diagram

A diagram that represents mathematical or logical sets pictorially as circles or closed curves within an enclosing rectangle, highlighting their commonalities and differences.

Proposition

A statement or assertion expressed in a way that it can be considered either true or false, serving as a fundamental component of logical arguments.

Venn Diagram

A diagram that uses circles to represent the relationships among various sets, highlighting where they overlap and do not overlap.

Proposition

An idea or plan put forward for consideration, especially in the context of a debate or discussion.