The Business Made a Loan to the Sales Manager

question 66

Multiple Choice

The business made a loan to the sales manager.

• A) An asset increased and another asset decreased.
• B) An asset decreased and an expense increased.
• C) An asset decreased and a liability decreased.
• D) A liability increased and an expense increased.

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Definitions:

Interest Rate

The cost of borrowing money or the return on invested funds, typically expressed as a percentage.

Present Value

The immediate worth of a future lump sum or successive cash inflows, considering a specific return rate.

Future Sum

The projected amount of money or value at a specific future date, usually factoring in variables such as interest rates and time periods.

Loan

A sum of money borrowed by one party from another, subject to repayment of the principal amount with interest.