A company borrows ($50,000) cash from Third National Bank. How does this transaction affect the accounting equation
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A company borrows \($50,000\) cash from Third National Bank.
How does this transaction affect the accounting equation for this company?
a. Assets increase by \($50,000;\) liabilities increase by \($50,000;\)
no effect on equity.
b. Assets increase by \($50,000;\) no effect on liabilities; equity increases by \($50,000.\)
c. Assets increase by \($50,000;\) liabilities decrease by \($50,000;
no\) effect on equity.
d. No effect on assets; liabilities increase by \($50,000;\) equity increases by \($50,000.\)
e. No effect on assets; liabilities increase by \($50,000;\) equity decreases by \($50,000.\)
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Related Book For
College Accounting Ch 1-14
ISBN: 9781260904314
1st Edition
Authors: John Wild, Vernon Richardson, Ken Shaw
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