Mack and Amy are making regular contributions of $200 a month from their salaries to a money market savings account.These transactions will
A)increase their net worth on their balance sheet.
B)decrease the surplus on their cash-flow statement.
C)not change either their net worth or the surplus.
D)both increase their net worth on their balance sheet and decrease the surplus on their income and expense statement.

Question

Quizplus · Accepted Answer

Making regular contributions of $200 a month from their salaries to a money market savings account will increase their assets, which will increase their net worth on their balance sheet. However, it will also reduce their cash balance, causing a decrease in surplus on their income and expense statement. Therefore, both options A and B are partially correct, but the most accurate answer is D, as it includes both explanations.

Mack and Amy Are Making Regular Contributions of $200 a Month