Purchased merchandise (periodic)issuing a note would have which effect on the categories?
A)Total assets would be increased.
B)Total liabilities would be increased.
C)Owner's equity would be decreased.
D)Both B and C would be correct.

Question

Quizplus · Accepted Answer

Issuing a note increases total liabilities (because the note is a liability) and decreases owner's equity (because the note is a debt that must be repaid).

Purchased Merchandise (Periodic)issuing a Note Would Have Which Effect on the Categories