which of the following is an example of increasing both current liability and use assets? a. paying off car…
which of the following is an example of increasing both current liability and use assets? a. paying off car loan and investing money in retirement fund b. paying down mortgage and putting money in savings c. selling a motorcycle to pay off a debt d. trading in an old car for a newer car and financing the balance please select the best answer from the choices provided a b c d
Answer
Brief Explanations:
- Option a: Paying off car loan decreases liability, investing in retirement fund doesn't increase current liability or use - assets in the required way.
- Option b: Paying down mortgage decreases liability, putting money in savings doesn't meet the criteria.
- Option c: Selling motorcycle to pay debt reduces assets and liability; financing balance doesn't increase use - assets as required.
- Option d: Trading in old car for a newer one (acquiring a use - asset) and financing the balance increases current liability.
Answer:
D. trading in an old car for a newer car and financing the balance