What Is the Impact on the Accounting Equation of Recording

question 45

Multiple Choice

What is the impact on the accounting equation of recording the issuance of a short-term note payable?

• A)Both assets and liabilities increase.
• B)Both assets and stockholders' equity decrease.
• C)Both assets and stockholders' equity increase.
• D)Liabilities increase and stockholders' equity decreases.

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Definitions:

Decentralization

The process of distributing or dispersing functions, powers, people or things away from a central location or authority.

Organizational Structure

The hierarchical arrangement of lines of authority, communications, rights, and duties within an organization.

Directors

Individuals in charge of overseeing the management and operational decisions in organizations or departments.

Accountability

The obligation to explain, justify, and take responsibility for one's actions in a professional or personal context.