Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 25 - No. 15)
What impact does the receipt of a bank loan have on the accounting equation?
Assets increase, liabilities increase.
Assets decrease, liabilities decrease.
Assets increase, liabilities decrease.
Assets decrease, liabilities increase.
Explanation
The receipt of a bank loan increases the company's bank balance (asset) and creates a loan liability.
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