Question

Lent $7,100 to an affiliate; accepted a note due in one year ____________.

A) Current assets increase
B) No impact on total assets
C) Operating activities decrease
D) Affects only liabilities

Answer 1

Lending money to an affiliate and accepting a note due in one year would increase the current assets on the balance sheet.

Step-by-step explanation:

When a company lends money to an affiliate and accepts a note due in one year, it would be recorded as an asset on the company's balance sheet. Specifically, it would increase the company's current assets since the note is due within one year. Therefore, the correct answer is A) Current assets increase.