What Is the Effect on the Statement of Financial Position

question 37

Multiple Choice

What is the effect on the statement of financial position when the business buys a car for $35,000, paying a deposit of $10,000 and promising to pay the balance within 60 days?

• A)Increase asset vehicle by $5,000; decrease asset bank by $5,000.
• B)Increase asset vehicle by $35,000; decrease asset bank by $10,000; increase liability accounts payable by $25,000.
• C)Increase asset vehicle by $25,000; decrease asset bank by $5,000; increase liability accounts payable by $20,000.
• D)None of the above.

---

Definitions:

Upright Stance

The ability to stand or walk on two legs with the spine perpendicular to the ground, characteristic of humans and some other species.

Jawless Fish

Fish with a skeleton of cartilage, no fins or jaws; a lamprey or hagfish.

Wiggling

Moving with short, quick movements from side to side or up and down, often seen in small creatures or as a way to adjust position.