Question

Pluto Corporation borrows $20,000 from the bank. What are the balance sheet effects of this transaction? (Select all that apply.)

a)decrease owners' equity
b)increase liabilities
c)increase assets

Answer 1

The balance sheet effects of Pluto Corporation borrowing $20,000 from the bank are an increase in liabilities and an increase in assets.

Step-by-step explanation:

The balance sheet effects of Pluto Corporation borrowing $20,000 from the bank are:

a) increase liabilities
b) increase assets