After Which of the Following Transactions Will the Accounting Equation

question 57

Multiple Choice

After which of the following transactions will the accounting equation NOT balance?

• A) theft of inventory by an employee
• B) receipt by the business of a gift from a grateful customer
• C) discovery of a reef of gold on land owned by the business
• D) payment to a supplier recorded as an increase in an asset and a decrease from another asset.

---

Definitions:

Cash Inflows

Money received by a business or organization through its activities, such as sales revenue, investment income, or financing.

Profitability Index

A ratio that calculates the relative profitability of an investment by dividing the present value of future expected cash flows by the initial investment cost.

Initial Investment

The amount of money used to start a project, investment, or business.

Cash Inflows

Funds entering a business from various sources, including sales, investments, and financing activities, critical for maintaining liquidity.