For the Following Transaction, Identify the Type of Change That

question 26

Multiple Choice

For the following transaction, identify the type of change that would have occurred in the accounting equation: Assets = Liabilities + Share capital + Opening retained profits + Revenue - Expenses - Dividends
An account for advertising was received. It related to an advertisement appearing on TV in the current accounting period. There was no previous record of the charge.

• A) An asset increased and another asset decreased.
• B) An asset decreased and an expense increased.
• C) An asset decreased and a liability decreased.
• D) A liability increased and an expense increased.

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Definitions:

First-Assignment-In-Time Rule

A rule which states that the first party granted an assignment is the party correctly entitled to the contractual right.

English Rule

A rule which states that the first assignee to give notice of assignment to the obligor is the party with rights to the contract.

American Rule

The American Rule is a legal principle stating that each party in a lawsuit is responsible for paying their own attorney's fees, unless specific authority granted by statute or contract allows the prevailing party to recover those fees from the loser.

Delegation of Duties

The process of assigning specific responsibilities or tasks to another individual, often within an organizational setting.