Giff Services Company Experienced Some Difficulties with Cash Flow So

question 87

Multiple Choice

Giff Services Company experienced some difficulties with cash flow so it approached one of its vendors about a payment extension. The vendor agreed to the extension on the condition that the company sign a note that includes 9% interest. What is the impact on the accounting equation of recording a note payable in exchange for the account payable?

• A)Both assets and liabilities increase.
• B)Both assets and liabilities decrease.
• C)Liabilities increase and stockholders' equity decreases.
• D)There is no net impact, as there are corresponding increases and decreases in liability accounts.

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Definitions:

Approach-Avoidance Conflict

A psychological conflict that occurs when a goal or event has both attractive and repulsive aspects, leading to ambivalence.

Immune System

The body's defense mechanism against infections, diseases, and other foreign substances.

Prolonged Stress

A state of continuous stress exposure over a lengthy period, potentially leading to adverse health effects, including psychological and physical problems.

Antigens

Substances that the body recognizes as foreign and that can elicit an immune response.