In Part,a Transaction Affects the Accounting Equation as Follows: Which

question 112

Multiple Choice

In part,a transaction affects the accounting equation as follows: Which of the following must be true for this transaction to keep the accounting equation in balance?

• A)If other assets remain the same,shareholders' equity must increase.
• B)If other assets remain the same,shareholders' equity must remain the same.
• C)If shareholders' equity remains the same,another asset must decrease.
• D)If shareholders' equity remains the same,all other assets must remain the same.

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Definitions:

Treasury Bill

Short-term government security issued at a discount from the face value and mature in a year or less, representing a safe investment.

Common Stock

A type of share or equity ownership in a company, giving holders voting rights and a share in the company's profits via dividends.

Securities Exchange Act

A U.S. law enacted in 1934, which governs the trading of securities, such as stocks and bonds, to protect investors and maintain fair and efficient markets.

Preliminary Prospectus

An initial document given to investors that outlines important details of a potential investment, including risks, objectives, and terms.