What Is the Effect on the Statement of Financial Position

Multiple Choice

What is the effect on the statement of financial position when the business buys a car for $25,000,paying a deposit of $5,000 and promising to pay the balance within 60 days?

A) Increase asset vehicle by $5,000; decrease asset bank by $5,000.
B) Increase asset vehicle by $20,000; increase liability accounts payable by $20,000.
C) Increase asset vehicle by $25,000; decrease asset bank by $5,000; increase liability accounts payable by $20,000.
D) None of the above.