PRC-1 · Chapter 1 · Question 75 of 100
Based on the dual-aspect concept, if a transaction results in a decrease in an asset, which of the following might be the corresponding effect to keep the equation balanced?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) A decrease in a liability or a decrease in equity (e.g., an expense).
Explanation
A decrease in an asset must be balanced by either an increase in another asset, a decrease in a liability, or a decrease in equity (such as recognizing an expense).
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