If a Company Borrows Money to Purchase Equipment

question 50

Multiple Choice

If a company borrows money to purchase equipment:

• A) one asset increases and another asset decreases.
• B) an asset increases and a liability increases.
• C) an asset decreases and a liability decreases.
• D) an asset increases and shareholders' equity increases.

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Definitions:

Flexible

Capable of being easily modified to respond to altered circumstances or conditions.

Optional

Something that is not mandatory or compulsory; it is left to one's choice or preference.

Venue

The geographic district in which an action is tried and from which the jury is selected.

Geographic Area

Refers to a specific physical region or territory defined by natural or artificial borders.