Which of the following is not possible when recording a transaction?
A)Liabilities increase and assets decrease.
B)Stockholders' equity increases and assets increase.
C)One asset increases and another asset decreases.

Question

Quizplus · Accepted Answer

Liabilities increasing while assets decrease is not a typical transaction recording scenario because transactions usually involve a trade-off between elements within the same category (e.g., assets, liabilities, equity) or an increase in one category matched with an increase or decrease in another. For example, paying off a debt (liability) would decrease cash (an asset), not increase liabilities.

Which of the Following Is Not Possible When Recording a Transaction