When a business borrows money,it incurs a(n)

Question

Quizplus · Accepted Answer

Borrowing money creates a liability for the business, as it now owes that money to the lender. A tax is a charge imposed by the government on income, and is not directly related to borrowing money. A receivable is an asset that a business is owed, and is the opposite of a liability. Additional equity would suggest that the business is raising funds by selling ownership shares, which is a different type of financing.

When a Business Borrows Money,it Incurs A(n)