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zloy xaker [14]
3 years ago
10

Which of the following statements about credits is true? A : Credits decrease both assets and liabilities. B : Credits increase

both assets and liabilities. C : Credits decrease assets and increase liabilities. D : Credits increase assets and decrease liabilities.
Business
1 answer:
e-lub [12.9K]3 years ago
7 0

Answer:

The correct answer is C. Credits decrease assets and increase liabilities.

Explanation:

A credit is a provision of money in the form of a loan, granted by a creditor (lender) to a debtor (borrower). For the creditor, the transaction gives rise to a claim on the borrower, under which he can obtain repayment of the funds and payment of remuneration (interest) according to a fixed schedule. For the borrower, whether it is a business or an individual, the credit establishes the existence of a debt (increasing liabilities) and opens the availability of a temporary financial resource.

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\left[\begin{array}{ccc}&January&February\\$beginning&45000&27500\\$receipts&97000&150000\\$disbursement&-114500&-163500\\$interest&0&0\\$subtotal&27500&14000\\$minimun&20000&20000\\$Financing&&\\$beginning&0&0\\$payment/loan&0&6000\\$ending&0&6000\\&&\\$ending cash&27500&20000\\\end{array}\right]

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