When a company borrows money (cash)from the bank,which type of account(s)is(are)increased?
A)asset account only
B)retained earnings only
C)liability account only
D)both asset and liability accounts

Question

Quizplus · Accepted Answer

When a company borrows money from the bank, both the asset account (cash) and the liability account (bank loan) are increased. The company's cash balance increases as it receives the loan (asset), but it also acquires a liability to repay the loan over time. Therefore, both the asset and liability accounts would be increased simultaneously.

When a Company Borrows Money (Cash)from the Bank,which Type of Account(s)is(are)increased