The Effect on the Statement of Financial Position When the Business

question 41

Multiple Choice

The effect on the statement of financial position when the business pays a creditor is:

• 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:

Initial Public Offering (IPO)

The first sale of stock by a company to the public, marking the transition from a private entity to a public company.

Gross Spread

The difference between the underwriting expense of a security and the amount received from the selling group.

Offering Price

The price at which new shares are offered to the public by an issuer or by shareholders of the company.