What Is the Effect on the Statement of Financial Position

question 30

Multiple Choice

What is the effect on the statement of financial position when the business pays a creditor?

• A)decrease asset creditor; decrease liability bank.
• B)decrease asset bank; decrease liability creditor.
• C)decrease asset bank; decrease equity.
• D)none of the above.

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Definitions:

Company Cost

The total expenditure incurred by a company in the process of producing or selling goods and services.

Risk-Adjusted Rate

A financial metric that adjusts returns on investments by taking into account the level of risk involved, aiming to provide a more accurate comparison across different investments.

Risk-Free Asset

An investment that provides a guaranteed return with no risk of financial loss.

Stock Market

A marketplace where buyers and sellers trade shares of publicly held companies, reflecting the economic health and investor sentiment toward those companies.