For the Following Transaction,identify the Type of Change That Would

question 39

Multiple Choice

For the following transaction,identify the type of change that would have occurred in the accounting equation: Assets = Liabilities + Issued Capital + Opening retained profits + Revenue - Expenses - Dividends
-
A new CEO was appointed to commence in 3 months' time on a salary of $400 000 per annum.

• A) A liability increased and another liability decreased.
• B) An asset decreased and a liability decreased.
• C) An asset increased and revenue increased.
• D) This had no effect on the accounting equation.

---

Definitions:

Parsimony

The principle that the simplest explanation of an occurrence, using the least number of assumptions or variables, is preferred.

Scope

The extent or range of an area or subject matter that something deals with or to which it is relevant.

Range

The difference between the highest and lowest values in a set, indicating the extent of variability.

Depth

The quality of being profound, in terms of complexity, insight, or understanding, often opposed to mere surface appearance.