Sweeney, Inc. borrowed $30,000 from the bank by signing a 9-month note payable. The proper accounting treatment of recording the note will
A)increase assets and liabilities.
B)decrease assets and increase liabilities.
C)increase liabilities and owners' equity.
D)increase assets and decrease owners' equity.

Question

Quizplus · Accepted Answer

When Sweeney, Inc. borrows $30,000 from the bank by signing a note payable, the company receives cash (an asset) and incurs a liability (the note payable). This transaction increases both assets and liabilities on the balance sheet.