An Increase in an Asset Account May Be Offset by A(n)

question 59

Multiple Choice

An increase in an asset account may be offset by a(n)

• A) decrease in a liability account.
• B) increase in an expense account.
• C) increase in owner's equity.
• D) decrease in owner's equity.

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Definitions:

Incremental Value

The additional value generated from a specific decision or investment, compared to a baseline scenario.

Equity-Financed

refers to the funding of business operations, investments, or assets through the issue of equity—such as stock—rather than taking on debt.

Firm A's Stock

Refers to the equity shares issued by a specific company, known here as Firm A, representing ownership interest.

Synergistic Benefits

The enhanced results or advantages that occur when two or more entities or factors work together, surpassing their individual capabilities.