A Business Borrows $10 000 from the Bank

question 26

Multiple Choice

A business borrows $10 000 from the bank.What effect does this transaction have on the accounting equation?

• A) An increase in the asset cash of $10 000 and an increase in the liability bank loan of $10 000.
• B) An increase in the asset cash of $10 000 and a decrease in the liability bank loan of $10 000.
• C) A decrease in the asset cash of $10 000 and a decrease in the liability bank loan of $10 000.
• D) A decrease in the asset cash of $10 000 and an increase in the liability bank loan of $10 000.

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Definitions:

Elm Trees

Type of deciduous trees known for their broad leaves and typically used in landscaping due to their distinctive appearance.

Dutch Elm Disease

A fungal disease spread by elm bark beetles, causing wilt and death in elm trees, significantly affecting elm populations mainly in Europe and North America.

Sample Size

The number of observations or data points used in a statistical sample.

Proportion

The fraction of a whole that represents a part of that whole, often expressed as a percentage.