When a Company Accepts a Note in Settlement of a Past

question 110

Multiple Choice

When a company accepts a note in settlement of a past due account, what is the effect on the accounting equation?

• A) an increase in a liability and a decrease in an asset
• B) an increase in an asset and a decrease in an asset
• C) a decrease in an asset and a decrease in stockholders' equity (expense)
• D) a decrease in a liability and an increase in stockholders' equity (revenue)

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Definitions:

Ability to Function

The capacity of an individual or system to operate or perform effectively in a variety of conditions or situations.

Spiritual Needs

The aspect of healthcare that recognizes and addresses the emotional and existential needs related to belief systems, faith, or religion.

Establishing Presence

The act of making oneself known or recognized in a particular space or situation.

Art of Nursing

The aspect of nursing that goes beyond the application of scientific knowledge and includes intuitive understanding, empathy, and the ability to connect with patients on a personal level.