Which of the following increases liabilities but not assets? a. taking out a loan to buy a new car b. taking out a loan to go on vacation c. using a credit card to buy a computer d. paying off a student loan select the best answer from the choices provided a b c d

B

Step-by-step explanation:

Simply put,

An asset is something that you own that is of value. You can later sell it for money.

A liability is the state of being responsible for something. Something that you owe and will have to pay back.

For option A, you take out a loan and later on you have to pay back. So increase of liability. But you buy a car, that is something of value that you can later gain from selling, so increases assets as well.

For option B, you take out a loan and later on you have to pay back. So increase in your liability. But u spend the money on vacation. You didn't gain something that can be of benefit later or maybe sold. So assets, DONT increase.

For option C, you use credit, so that money you have to pay back later, hence increase in your liabilities. But you buy a computer which is of value, you can sell it later and get money. So there's an increase in your assets.

For option D, you pay off your loan, so your liabilities have decreased.

Option B is the one which increases your liabilities but DOES NOT increase your assets.