What Is the Effect on the Balance Sheet of Recording

question 133

Multiple Choice

What is the effect on the balance sheet of recording a $200 cash purchase of raw materials?

• A) Assets decrease by $200 and equity decreases by $200.
• B) Assets and equity do not change.
• C) Assets increase by $200 and equity increases by $200.
• D) Assets increase by $200 and equity does not change.

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Definitions:

Horizontal Growth

Expansion or growth of an entity (such as a company or plant) outward rather than upward, which can involve increasing product lines or locations.

Radial Growth

The pattern of growth that expands outward in all directions, commonly observed in fungi, certain plants, and some animals like jellyfish.

Cork Cambium

A lateral meristem that produces cork cells and cork parenchyma; cork cambium and the tissues it produces make up the periderm (outer bark) of a woody plant. Compare with vascular cambium.

Secondary Xylem

The part of a plant that contributes to wood formation, resulting from the division of cambium cells and providing structural support and water transport.