Which of the following properly describes one of the impacts on the financial statements when a company borrows $38,000 from a local bank? Group of answer choices Liabilities increased $38,000. Assets decreased $38,000. Net income decreased $38,000 Stockholders' equity increased $38,000.

Which of the following properly describes one of the impacts on the financial statements when a company borrows $38,000 from a local bank? Group of answer choices Liabilities increased $38,000. Assets decreased $38,000. Net income decreased $38,000 Stockholders' equity increased $38,000.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Which of the following properly describes one of the impacts on the financial statements when a company borrows $38,000 from a local bank?

Group of answer choices

Liabilities increased $38,000.

Assets decreased $38,000.

Net income decreased $38,000

Stockholders' equity increased $38,000.

Definition Definition Assets available to stockholders after a company's liabilities are paid off. Stockholders’ equity is also sometimes referred to as owner's equity. A stockholders’ equity or book value generally includes common stock, preferred stock, and retained earnings and is an indicator of a company's financial strength.

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