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.

---

Definitions:

Parameters

Variables that are specified in the definition of methods/function, representing the data that needs to be passed into these methods/functions when they are called.

Abstract Method

A method declared in an abstract class that has no implementation and must be overridden by subclasses.

Private Modifier

A keyword in object-oriented programming languages that restricts the visibility of a class member, making it accessible only within the same class.

Concrete Class

A class in object-oriented programming that can be instantiated, as opposed to an abstract class, and provides implementations for all its methods.