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Safari File Edit View History Bookmarks Develop Window Help 1M mybusinesscourse.com BusinessCourse Menu Meredith Milholland- ASSIGNMENT NAVIGATION ACCT20653:080-Intro to Accounting-TTH 12345 QUESTION 18 Incorrect Mark0.00 ot o 100 Flag question Financial: Ch 1: Financial Accounting and Business Decisions 6 78910 At the beginning of the month, a company purchased a new truck for $45,000, paying 21,000 cash and agreeing to pay the balance over 12 months through a no-interest financing offer provided by the car dealer. The entry to record the purchase of the truck is recorded at month-end. 11 1213 14 15 Financial: Ch 2: Processing Accounting Information 16 17 18 19 20 What would the effect of this transaction on the company\'s current month-end accounting equation? (Hint: First financing payment was made before current month-end.) 21 22 23 24 25 Financial: Ch 3: Accrual Basis of Business Accounting Select one 26 27 28 29 30 A. No effect on Assets; $24,000 increase in Liabilities, $24,000 decrease in Stockholders\' Equity 31 3233 34 Financial: Ch 4: Understanding Financial Statements B. $45,000 increase in Assets No effect on Liabilities; $45,000 increase in Stockholders\' Equity Finish attempt C. $22,000 increase in Assets; $22,000 increase in Liabilities; No effect on Stockholders\' Equity Financial. Ch 13: Analysis and Interpretation of Financial Statements D. No effect on Assets, $45,000 decrease in Liabilities; $45,000 increase in Stockholders\' Equity Check Managerial: Ch 1: Overview of Managerial Accounting ncorrect Marks for this submission: 0.00/1.00. Managerial: Ch 2

Solution

Ans (A) No effect on assets $24,000 increase in liability ; $24000 decrease in stockholdrer\'s equity,because any increase in liabilities reduces the overall equity in the business. Liability indicates the payment that must be made .