Purchased merchandise (perpetual),by issuing a note,would have which effect on the categories?
A)Total assets would be decreased.
B)Total liabilities would be increased.
C)Owner's equity would be decreased.
D)None of these answers are correct.

Question

Quizplus · Accepted Answer

Issuing a note means obtaining a loan, which increases the company's liabilities. The purchase of merchandise would increase the company's assets and have no effect on owner's equity, making options A and C incorrect. Option D is also incorrect as one of the options is correct.

Purchased Merchandise (Perpetual),by Issuing a Note,would Have Which Effect on the Categories