Several Transactions Are Listed

question 100

Multiple Choice

Several transactions are listed. Use the choices to identify the effect on the accounting equation for each transaction listed. (Choices may be used more than once.)
-borrowing cash from a bank

• A)assets and liabilities increase
• B)assets and contributed capital increase
• C)assets and retained earnings increase
• D)two asset accounts are impacted, but there is no net effect on total assets
• E)assets and liabilities decrease
• F)assets and retained earnings decrease
• G)liabilities increase and retained earnings decrease
• H)liabilities decrease and retained earnings increase

---

Definitions:

Apparent Agency

A legal concept where a principal is liable for the acts of an agent who appears to be acting within the scope of authority, irrespective of whether the principal actually granted such authority.

Express Agency

An agency relationship created by explicit instruction or agreement, where the agent is authorized to act on behalf of the principal.

Implied Agency

A type of agency relationship created by the actions of the parties involved, not by written agreement, where an agent is presumed to have authority to act on behalf of another.

Nonprogrammed Decision

A new, complex decision that requires a creative solution.