Mr. Bean lends P500,000 cash to the entity. At the same time, the entity uses part of the money to repay the amount owed to a creditor and holds the remaining P400,000. Which of the following effects on the accounting equation is correct? * O Assets increase by P400,000 and liabilities increase by P400,000
Mr. Bean lends P500,000 cash to the entity. At the same time, the entity uses part of the money to repay the amount owed to a creditor and holds the remaining P400,000. Which of the following effects on the accounting equation is correct? * O Assets increase by P400,000 and liabilities increase by P400,000
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Mr. Bean lends P500,000 cash to the entity. At the same time, the entity uses part of the money
to repay the amount owed to a creditor and holds the remaining P400,000. Which of the
following effects on the accounting equation is correct? *
O Assets increase by P400,000 and liabilities increase by P400,000
Assets increase by P500,000 and liabilities increase by P500.000
O Assets increase by P400,000 and liabilities decrease by P500,000
O Assets decrease by P500,000 and liabilities increase by P400,000
Transcribed Image Text:Mr. Bean lends P500,000 cash to the entity. At the same time, the entity uses part of the money
to repay the amount owed to a creditor and holds the remaining P400,000. Which of the
following effects on the accounting equation is correct? *
O Assets increase by P400,000 and liabilities increase by P400,000
Assets increase by P500,000 and liabilities increase by P500.000
O Assets increase by P400,000 and liabilities decrease by P500,000
O Assets decrease by P500,000 and liabilities increase by P400,000
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