Which of the Following Changes Describes the Purchase of $3,000

question 67

Multiple Choice

Which of the following changes describes the purchase of $3,000 of equipment financed by the issuance of a long-term note payable?

• A) Assets and shareholders' equity increase by $3,000.
• B) Assets and shareholders' equity decrease by $3,000.
• C) Assets and liabilities decrease by $3,000.
• D) Assets and liabilities increase by $3,000.

---

Definitions:

Budget Line

A graphical representation of all possible combinations of two goods that an individual can afford given their income and the prices of the goods.

Initially Consumed

Refers to the first set of goods or services that are used or consumed by an individual or entity.

Consumer's Budget Line

A graphical representation that shows all possible combinations of two goods that a consumer can purchase with a fixed budget.

Price Ratio

The relative price of one good or service compared to another, typically used in the analysis of consumer choice and budget allocation.