When a Business Borrows Money from a Bank,the Immediate Effect

question 90

True/False

When a business borrows money from a bank,the immediate effect is an increase in total assets and a decrease in liabilities or owners' equity.

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Definitions:

Federal Reserve Board

An independent agency of the federal government established in 1913 to regulate the nation’s banking and financial industry.

Securities

Financial instruments that represent an ownership position in a publicly-traded corporation (stock), a creditor relationship with a governmental body or a corporation (bond), or rights to ownership as represented by an option.