If the Assets of a Business Increased $89,000 During a Period

question 50

Multiple Choice

If the assets of a business increased $89,000 during a period of time and its liabilities increased $67,000 during the same period, equity in the business must have:

• A) Increased $22,000.
• B) Decreased $22,000.
• C) Increased $89,000.
• D) Decreased $156,000.
• E) Increased $156,000.

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Definitions:

Cash Outflow

Money that is spent or paid out by a business or individual, resulting in a decrease in cash balance.

Financing Activities

Refers to transactions and business events affecting long-term liabilities and equity, including obtaining resources from owners and providing them with a return on their investment.

Bonds Payable

Bonds payable refers to the long-term debt instruments issued by a company to borrow funds, which must be repaid at a specified maturity date.

Issuing

The act of distributing something, such as a company releasing new shares of stock to the public or a government agency providing official documents.