Which of the Following Direct Effects on the Accounting Equation

question 117

Multiple Choice

Which of the following direct effects on the accounting equation isn't possible as a result of a single business transaction?

• A)An increase in an asset and a decrease in another asset.
• B)An increase in an asset and an increase in stockholders' equity.
• C)A decrease in stockholders' equity and an increase in an asset.
• D)An increase in a liability and an increase in an asset.

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Definitions:

Mark-up

An enhancement to the price at which goods are bought to include expenses and profit.

Selling Price

The amount of money a buyer pays to purchase a product or service from a seller.

Mark-up

The uplift on the initial cost of items to cover business overheads and secure earnings.

Construction Purchased Saws

The acquisition of saws for the purpose of using them in construction projects, considered a capital expense.