Which of the Following Could Describe the Effects of an Asset

question 106

Multiple Choice

Which of the following could describe the effects of an asset exchange transaction on the accounting equation? $\begin{array}{ccccc} \text { Assets} &=& \text { Liabilities} & + \text { stockholcers }{ }^{\prime} \text { equity } \\\end{array}$
A.
$\begin{array}{llcc}&+/-&&&& \text {n/a }&&&&&& \text {n/a } \\\end{array}$

B.
$\begin{array}{llcc}&+&&&&& \text {n/a } &&&&&&&+ \\\end{array}$

C.
$\begin{array}{llcc} &-& &&&& \text { n/a } &&&&&&&-\\\end{array}$

D.
$\begin{array}{llcc}&+&&&&&&+&&&&&&& \text {n/a } \\\end{array}$

• A) Option A
• B) Option B
• C) Option C
• D) Option D

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Definitions:

Cash Dividends

Payments made by a corporation to its shareholder members, typically in the form of cash, as a distribution of profits.

Accounts Receivable

Money owed to a company by its customers from sales or services rendered on credit.

Income Tax Payable

A liability account on a company's balance sheet representing the taxes owed to the government but not yet paid.

Sales

The trading of products or services in return for money, which serves as the main income stream for the majority of companies.