A Company Prepared the Following Journal Entry: Which of the Following

question 111

Multiple Choice

A company prepared the following journal entry: Which of the following statements incorrectly describes the effect of this journal entry on the financial statements?

• A)Total liabilities increase by only the amount of the credit to bonds payable.
• B)Discount on bonds payable is reported on the balance sheet as a contra-liability account.
• C)Assets increase by the amount of the debit to cash.
• D)The cash inflow (debit) is reported as a cash flow from financing activities.

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Definitions:

Selective Serotonin Reuptake Inhibitors

A class of drugs commonly used to treat depression and anxiety disorders by increasing the levels of serotonin in the brain.

Regression Toward the Mean

A statistical phenomenon that results when unusually large or small measurements tend to be followed by measurements that are closer to the average.

Control Groups

Groups in experimental research that do not receive the experimental treatment and are used as a benchmark to measure how the other tested subjects do.

Placebo Effects

Positive changes in health perceived after taking a treatment with no therapeutic effect, attributed to the individual's belief in the treatment's efficacy.