When a company borrows money from the bank,which type of account(s)is(are)increased?
A)asset account only
B)Retained Earnings only
C)liability account only
D)asset and liability accounts

Question

Quizplus · Accepted Answer

When a company borrows money from the bank, it increases both the asset account (cash) as the company receives the money and the liability account (notes payable) as the company owes the bank the borrowed amount plus interest. Therefore, both asset and liability accounts are increased.

When a Company Borrows Money from the Bank,which Type of Account(s)is(are)increased