What Is the Effect on the Statement of Financial Position

question 4

Multiple Choice

What is the effect on the statement of financial position when the business buys a car for $25,000,paying a deposit of $5,000 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 $20,000; increase liability accounts payable by $20,000.
• 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:

First Amendment

A provision in the United States Constitution that prohibits the government from interfering with the freedom of speech, religion, press, assembly, and petition.