Palmer Corporation borrows $40,000 cash by signing a note with the bank. Which of the following statements correctly shows the effect of this transaction on the accounting equation? Multiple Choice

A. Assets will increase by $40,000, liabilities will increase by $40,000, and stockholders' equity will remain unchanged

B. Assets will increase by $40,000, liabilities will decrease by $40,000, and stockholders' equity will remain unchanged

C. Assets will increase by $40,000, liabilities will remain unchanged, and stockholders' equity will increase by $40,000

D. Assets will increase by $40,000, liabilities will remain unchanged, and stockholders' equity will decrease by $40,000

Question

Guzman

Business

29 April, 01:11

Palmer Corporation borrows $40,000 cash by signing a note with the bank. Which of the following statements correctly shows the effect of this transaction on the accounting equation? Multiple Choice

A. Assets will increase by $40,000, liabilities will increase by $40,000, and stockholders' equity will remain unchanged

B. Assets will increase by $40,000, liabilities will decrease by $40,000, and stockholders' equity will remain unchanged

C. Assets will increase by $40,000, liabilities will remain unchanged, and stockholders' equity will increase by $40,000

D. Assets will increase by $40,000, liabilities will remain unchanged, and stockholders' equity will decrease by $40,000

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Answers (1)

Know the Answer?

Philip Archer · Answer 1

Which of the following statements correctly shows the effect of this transaction on the accounting equation?

Explanation:

A. Assets will increase by $40,000, liabilities will increase by $40,000, and stockholders' equity will remain unchanged