What Is the Effect on the Statement of Financial Position

question 37

Multiple Choice

What is the effect on the statement of financial position when the business buys a car for $35,000, paying a deposit of $10,000 and promising to pay the balance within 60 days?

• A)Increase asset vehicle by $5,000; decrease asset bank by $5,000.
• B)Increase asset vehicle by $35,000; decrease asset bank by $10,000; increase liability accounts payable by $25,000.
• C)Increase asset vehicle by $25,000; decrease asset bank by $5,000; increase liability accounts payable by $20,000.
• D)None of the above.

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Definitions:

Ethernet

A family of computer networking technologies commonly used in local area networks (LAN), metropolitan area networks (MAN) and wide area networks (WAN).

Federal Communication Commission

A United States government agency that regulates interstate and international communications by radio, television, wire, satellite, and cable.

Internet Access

The ability of individuals or organizations to connect to the Internet through a computer or other device.

RFID

Radio-Frequency Identification, a technology that uses electromagnetic fields to automatically identify and track tags attached to objects.