Accounting · Balance Sheet Equation
A firm utilizes its short-term bank overdraft facility to pay off a long-term maturing debenture. How does this specific transaction affect the total value of the balance sheet equation?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Total assets increase, total liabilities increase, and equity remains unchanged.
- 2Total assets decrease, total liabilities decrease, and equity remains unchanged.
- 3Total assets remain unchanged, total liabilities remain unchanged, and equity remains unchanged.✓
- 4Total assets remain unchanged, total liabilities decrease, and equity increases.
Correct answer
Total assets remain unchanged, total liabilities remain unchanged, and equity remains unchanged.
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