Total Liabilities Increase by $7,000

question 44

Multiple Choice

Total liabilities increase by $7,000.How is the accounting equation affected?

• A) Either assets have increased by $7,000, or owner's equity has decreased by $7,000.
• B) Assets have decreased by $7,000.
• C) Assets and owner's equity have each decreased by $3,500.
• D) Owner's equity has increased by $7,000.

---

Definitions:

Protect Competition

Measures and policies established to ensure fair competition within markets, preventing monopolies and fostering innovation and fairness.

Social Regulation

Regulations that aim to protect public welfare, including health and safety standards, environmental protections, and consumer rights.

No Free Lunch

Refers to the idea that one cannot get something for nothing; for every benefit or good received, a cost, either direct or indirect, is incurred.

Public Interest

A concept referring to the general welfare or well-being of the community at large.