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.

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Definitions:

Hirsutism

An excessive growth of dark or coarse hair in women in areas typically associated with male hair patterns, due to various hormonal imbalances.

Alopecia

A condition characterized by hair loss from the scalp or body, which can be temporary or permanent.

Lanugo

Fine, soft hair, especially that which covers the body and limbs of a newborn human.

Icteric Sclera

The yellowing of the whites of the eyes, which is a symptom of jaundice resulting from elevated bilirubin levels in the blood.