Which of the Following Transactions Will Cause Both the Left

question 50

Multiple Choice

Which of the following transactions will cause both the left and right side of the accounting equation to decrease?

• A)Collecting cash from a customer who owed us money.
• B)Paying a supplier for inventory we previously purchased on account.
• C)Borrowing money from a bank.
• D)Purchasing equipment using cash.

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Definitions:

Precommitments

Strategies or actions taken in advance to bind oneself to a specific course of action, often used to influence future decision-making or outcomes.

Present Consumption

The use of goods and services for immediate satisfaction or needs, as opposed to saving or investing for future use.

Behavioral Economists

Economists who study the effects of psychological, social, cognitive, and emotional factors on the economic decisions of individuals and institutions and how those decisions vary from those implied by classical theory.

System 2

A concept from cognitive psychology that refers to the deliberate, analytical, and slow way of thinking, as opposed to quick, instinctual decisions.