Katie's Vegetarian Restaurant, with total assets of $90,000, borrows $15,000 from the bank. Which of the following is a true statement upon borrowing the money?
Total assets are now $105,000.
Total assets are now $80,000.
Total assets are now $15,000.
Total assets are now $75,000.
Answer- A
I disagree. That 15,000 she borrowed must be repaid.
So it is D
Right. D
yes it is D
To determine the true statement upon borrowing the money, we need to understand how borrowing affects total assets.
When Katie's Vegetarian Restaurant borrows $15,000 from the bank, it means they are taking on a liability (i.e., a debt) of $15,000. Borrowing money does not directly impact total assets. It only increases the amount of money owed by the business.
Therefore, the true statement upon borrowing the money is not any of the options listed. Instead, the correct response should be: The borrowing does not directly affect total assets; they remain at $90,000.