One effect on the accounting equation when a firm lends money is
A) stockholders' equity decreases.
B) liabilities decrease.
C) liabilities increase.
D) total assets remain the same.

Name: One effect on the accounting equation when a firm lends money is A) stockholders' equity decreases. B) liabilities decrease. C) liabilities increase. D) total assets remain the same.
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Question

Quizplus · Accepted Answer

When a firm lends money, it exchanges one asset (cash) for another asset (notes receivable), keeping the total assets the same.

One Effect on the Accounting Equation When a Firm Lends