Asked by mallika persaud on Apr 29, 2024
Verified
Altoona Products buys a $500,000 machine by taking out a bank loan.The company's assets will _____ by $500,000 while its liabilities will _?____?? by $500,000.
A) rise; rise
B) fall; fall
C) rise; fall
D) fall; rise
Assets
Resources owned by a business or individual that are expected to provide future economic benefit.
Liabilities
Financial obligations or debts that a company or individual owes to others.
- Acquire knowledge on the foundational elements of assets, liabilities, and equity.
Verified Answer
SV
Shivam VaishMay 01, 2024
Final Answer :
A
Explanation :
When a company buys a machine by taking out a loan, its assets increase due to the addition of the machine, and its liabilities increase by the amount of the loan taken to purchase the machine.
Learning Objectives
- Acquire knowledge on the foundational elements of assets, liabilities, and equity.