Which of the Following Direct Effects on the Accounting Equation

question 47

Multiple Choice

Which of the following direct effects on the accounting equation is not possible as a result of a single business transaction which impacts only two accounts?

• A)An increase in an asset and a decrease in another asset.
• B)An increase in an asset and an increase in stockholders' equity.
• C)A decrease in stockholders' equity and an increase in an asset.
• D)An increase in a liability and an increase in an asset.

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Definitions:

Vertical Integration

A strategy where a company expands its business operations into different steps on the same production path, such as when a manufacturer owns its supplier and/or distributor.

Corporate Ownership

Refers to the ownership of a company by individuals or entities, often represented by the possession of company shares, which grants certain rights and responsibilities regarding the company's management and earnings.

Advertising

The activity or profession of creating and distributing content, often paid, to promote products, services, or brands to a targeted audience.

Revolving Door

A term describing the movement of personnel between roles as legislators and regulators and the industries affected by the legislation and regulation, often highlighting potential conflicts of interest.