When a Company Pays an Amount It Owes a Creditor

question 140

Multiple Choice

When a company pays an amount it owes a creditor:

• A)assets are decreased and net income is decreased.
• B)assets are decreased and liabilities are increased.
• C)liabilities are decreased and net income is increased.
• D)assets are decreased and liabilities are decreased.

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Definitions:

Savings

Money that has been set aside for future use, often stored in a bank or financial institution to accrue interest.

Procedural Memory

A type of long-term memory involved in learning and performing tasks that involve motor skills, such as riding a bike or typing, without conscious awareness of previous experiences.

Declarative

Pertaining to memories that can be consciously recalled, such as facts and events.

Episodic

Pertaining to or consisting of episodes; often used to describe types of memory that involve recalling specific events from the past.