If a Company Purchases Equipment for $65,000 by Issuing a Note

question 30

Multiple Choice

If a company purchases equipment for $65,000 by issuing a note payable:

• A) Total assets will increase by $65,000.
• B) Total assets will decrease by $65,000.
• C) Total assets will remain the same.
• D) The company's total equity will decrease.

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Definitions:

Urea

(urea) The principal nitrogenous excretory product of mammals; one of the water-soluble end products of protein metabolism.

Nitrogenous Waste

Waste products containing nitrogen, such as ammonia, urea, and uric acid, which are produced from the metabolic breakdown of proteins and nucleic acids.

Adult Amphibians

Mature stages of amphibians, which typically involve a transition from an aquatic to a terrestrial lifestyle, involving changes in respiration and locomotion.

Urea

A nitrogenous compound produced in the liver from ammonia and carbon dioxide, excreted by the kidneys.