Which of the Following Describes the Effects of an Asset

question 71

Multiple Choice

Which of the following describes the effects of an asset use transaction on the accounting equation?
$\begin{array}{|c|c|c|c|c|c|}\hline & \text { Assets } & = & \text { Liab. } & + & \text { Equity } \\\hline \mathrm{A} & + & = & + & + & \text { NA } \\\hline \mathrm{B} & - & = & \mathrm{NA} & + & - \\\hline \mathrm{C} . & +- & = & \mathrm{NA} & + & \mathrm{NA} \\\hline \mathrm{D} . & \mathrm{NA} & = & + & + & \mathrm{NA} \\\hline\end{array}$

• A) Option A
• B) Option B
• C) Option C
• D) Option D

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Definitions:

Current Assets

Assets that a company expects to convert to cash or use up within one year.

Balance Sheet

A financial statement that reports the assets, liabilities, and owner’s equity at a specific date.

Finished Goods Inventory

Inventory consisting of products that have been completed but not yet sold to customers.

Cost Of Goods Manufactured

The total production cost incurred by a company to produce goods in a specific period, including labor, material, and overhead costs.