What Is the Impact on the Accounting Equation of Recording

question 148

Multiple Choice

What is the impact on the accounting equation of recording the issuance of a short-term note payable?

• A) Assets and liabilities both increase.
• B) Assets and shareholders' equity both decrease.
• C) Assets and shareholders' equity both increase.
• D) Liabilities increase and shareholders' equity decreases.

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Definitions:

Behavioral

Pertaining to the actions or responses of individuals or groups in relation to their environment or stimuli.

Psychoanalytic

Pertaining to psychoanalysis, a method of therapy and theory of personality developed by Freud that emphasizes unconscious motives and conflicts.

Rational-emotive Therapist

A mental health professional who employs rational emotive behavior therapy to help patients identify irrational beliefs and negative thought patterns to encourage emotional well-being.

Cognitive Behavioral

Pertaining to a type of psychotherapeutic treatment that helps individuals understand the thoughts and feelings that influence behaviors, primarily through the analysis and correction of cognitive distortions.