Which of the following direct effects on the accounting equation isn't possible as a result of a single business transaction?
A)An increase in an asset and a decrease in another asset.
B)An increase in an asset and an increase in stockholders' equity.
C)A decrease in stockholders' equity and an increase in an asset.
D)An increase in a liability and an increase in an asset.

Question

Quizplus · Accepted Answer

A single transaction that results in a decrease in stockholders' equity and an increase in an asset is not possible because the accounting equation would not be in balance.

Which of the Following Direct Effects on the Accounting Equation