Which of the Following Changes Describes the Purchase of $2,000

question 86

Multiple Choice

Which of the following changes describes the purchase of $2,000 of inventory through payment on credit?

• A) Assets and shareholders' equity increase by $2,000.
• B) Assets and shareholders' equity decrease by $2,000.
• C) Assets and liabilities increase by $2,000.
• D) Assets and liabilities decrease by $2,000.

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Definitions:

365-Day Year

A time reckoning method that accounts for all the days in a common, non-leap year, used in various financial and calendar calculations.

Total Amount

The complete value, sum, or quantity of something.

Ordinary Interest

interest calculated on a loan or investment based on a 360-day year, commonly used in banking and finance.

Exact Interest

Interest calculation method utilizing the actual number of days in the interest period and a 365-day year to determine the accurate interest due.