Question 4 (3 points) The Federal Reserve continues to raise interest rates to its lending banks....

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Question 4 (3 points) The Federal Reserve continues to raise interest rates to its lending banks. Those banks in turn, increase their lending (loan) rates to customers. How do increased interest rates affect the accounting equation? Saved 1) Net Income declines and Accrued Interest Payable increases. 2) Both sales and expenses decrease. 3) Both assets and liabilities increase. 4) There is little effect on net income because interest expense is a tax deduction. Question 4 (3 points) The Federal Reserve continues to raise interest rates to its lending banks. Those banks in turn, increase their lending (loan) rates to customers. How do increased interest rates affect the accounting equation? Saved 1) Net Income declines and Accrued Interest Payable increases. 2) Both sales and expenses decrease. 3) Both assets and liabilities increase. 4) There is little effect on net income because interest expense is a tax deduction.

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The detailed answer for the above question is provided below The correct answer is 3 Both assets and ... View the full answer