Borrowing $100,000 of cash from First National Bank would do which of the following?

Question

Quizplus · Accepted Answer

Borrowing $100,000 of cash from First National Bank increases the company's liabilities, specifically notes payable. Since notes payable is a liability account, it is increased by recording a credit. Therefore, option C is the correct choice. Option A is incorrect because while cash is increasing, it is increasing because the company is receiving cash, not because it is crediting cash. Option B is incorrect because a debit would decrease notes payable, which is the opposite of what is happening here. Option D is incorrect because the company is receiving cash, not decreasing cash.

Borrowing $100,000 of Cash from First National Bank Would Do