Liz, After Qualifying at University and Having Several Years' Experience

question 13

Multiple Choice

Liz, after qualifying at university and having several years' experience decides to set up her own dental practice. On 1 March she deposits $25 000 into a bank account she has opened for the practice. Which of the following represents the effect of this transaction on the accounting equation?

• A) Increase in assets of $25 000; increase in equity of $25 000.
• B) Increase in assets of $25 000; decrease in equity of $25 000.
• C) Increase in assets of $25 000; increase in liabilities of $25 000.
• D) Decrease in assets of $25 000; increase in equity of $25 000.

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Definitions:

Predictions

Statements or claims made about the future based on current evidence or past experiences.

Stanley Milgram

A psychologist known for his research on obedience, demonstrating how people are willing to follow orders from an authority figure, even to the extent of causing harm to others.

Dissent

The expression or holding of opinions at variance with those previously, commonly, or officially held.

Situational Factors

External influences that affect an individual's behavior, decision-making process, and performance in various contexts.