The Following Entry Was Recorded in the Books of Brighty

question 200

Multiple Choice

The following entry was recorded in the books of Brighty Company. What is the impact of this entry on the accounting equation? ​

• A) an increase in Assets and an increase in Equity
• B) an increase in Assets and an increase in Liabilities
• C) a decrease in Assets and a decrease in Liabilities

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Definitions:

Residual

The difference between an observed value and the estimated value in a regression analysis.

Multicollinearity

A situation in regression analysis in which predictor variables are highly correlated, making it difficult to isolate the individual effects of the predictors.

Correlation Matrix

A table showing the correlation coefficients between several variables, which can indicate the strength and direction of the relationship between pairs of variables.

Multicollinearity

A situation in regression analysis where two or more predictor variables are highly correlated, potentially undermining the statistical validity of the analysis.