If a Transaction Causes an Asset Account to Decrease,which of the Following

question 25

Multiple Choice

If a transaction causes an asset account to decrease,which of the following related effects may occur?

• A)An increase of equal amount in an owners' equity account.
• B)An increase in a liability account.
• C)An increase of equal amount in another asset account.
• D)An increase in the combined total of liabilities and owners' equity.

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Definitions:

After-Tax Net

The remaining income of a business or investment after all taxes have been deducted.

Unlevered Cost

Refers to the cost a company would incur without the benefit or cost of debt financing.

Capital Structure

The mix of a company's long-term debt, specific short-term debt, common equity and preferred equity, which is used to finance its overall operations and growth.

Economic Expansion

A phase of the business cycle where the economy grows and increases in activity, marked by rising GDP, employment, and income.