Which of the Following Would Result If the Business Purchased

question 82

Multiple Choice

Which of the following would result if the business purchased supplies on credit?

• A) Supplies would increase and Cash would decrease.
• B) Supplies would increase and Capital would increase.
• C) Supplies would increase and Accounts Payable would increase.
• D) The purchase of supplies is not a business transaction.

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Definitions:

Total Interest Earned

The cumulative amount of interest received from an investment over a particular period.

Original Investment

The initial amount of money put into an investment or project, serving as the baseline for measuring future earnings or losses.

Nominal Interest Rate

The interest rate before adjustments for inflation, as opposed to the real interest rate.

Periodic Interest Rate

The interest rate applied to a loan or investment for a specific period, usually shorter than a year.