A Transaction That Decreases a Liability and Increases an Asset

question 182

True/False

A transaction that decreases a liability and increases an asset must also affect one or more other accounts.

---

Definitions:

Interest-bearing Asset

A type of investment that earns interest over time, such as savings accounts, certificates of deposit, and bonds.

Default Risk

The risk that a borrower will not make the required payments on a debt.

Trade Credit

An arrangement where a buyer can purchase goods on account without paying cash upfront, with payment to the seller due at a later date.

Inventory Obsolescence

Refers to the reduction in the value of inventory items due to them becoming outdated, no longer useful, or unsalable.