Match Each Transaction with Its Effect on the Accounting Equation

question 133

Multiple Choice

Match each transaction with its effect on the accounting equation. Each letter may be used more than once.
-Borrowed money from a bank

• A)Increase assets, increase liabilities
• B)Increase liabilities, decrease owner's equity
• C)Increase assets, increase owner's equity
• D)No effect
• E)Decrease assets, decrease liabilities
• F)Decrease assets, decrease owner's equity

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Definitions:

Discontinuing Product

The process of ceasing the manufacture, sale, and support of a product line or brand.

Drag on Profits

Factors or expenses that reduce the overall profitability of a business.

Split-off Point

The stage in a manufacturing process where multiple products are derived from a single raw material or process, making the costs attributable to each product identifiable.

Avoidable Fixed Costs

Costs that can be eliminated if a particular business segment or operation is discontinued.