One Effect on the Accounting Equation When a Firm Borrows

question 177

Multiple Choice

One effect on the accounting equation when a firm borrows money is

• A) stockholders' equity decreases.
• B) assets increase.
• C) liabilities decrease.
• D) assets decrease.

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Definitions:

Chipotle

An international chain of fast-casual restaurants specializing in tacos and Mission-style burritos.

Inferior Good

Goods whose demand declines as consumer income rises, distinct from normal goods where demand increases with higher income.

Buyers' Incomes

The total earnings of consumers which influence their purchasing power and demand in the marketplace.

Rightward Shift

In economic graphs, a movement to the right of a curve, indicating an increase in supply or demand depending on the context.