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3 years ago

A company borrowed from the bank by signing a longterm note. How does this transaction affect the accounting equation?

Business

1 answer:

mestny [16]3 years ago

8 0

Answer:

Balanced

Explanation:

Accounting equation: Assets = Liabilities + Equity

If a company borrows a loan note from the bank this will alternatively increase the assets because the cash received from the bank and liabilities portion will also increase at the opposite side with the same amount the asset is increased therefore the accounting equation will be balanced.

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Note: The complete question is attached as picture below

We are add the previous month +10% to get that month's amounts

Sales Budget

January February March

Cash sales $50,000 $55,000 $60,500

Credit sales $120,000 $132,000 $145,200

Total sales $170,000 $187,000 $205,700

Workings:

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3 years ago

A company borrowed from the bank by signing a longterm note. How does this transaction affect the accounting​ equation?

A company borrowed from the bank by signing a longterm note. How does this transaction affect the accounting equation?