The loss of equipment in a fire disaster results in?
Answer Details
In a fire disaster, the loss of equipment results in a decrease in assets. This is because equipment is considered a part of the company's assets. When it is lost due to a fire, the total value of the assets owned by the company decreases.
There is no direct impact on liabilities since liabilities refer to the amount owed by the company to other parties, such as loans, debts, and accounts payable. However, if the company is unable to replace the lost equipment, it may lead to a decrease in its ability to generate revenue, which can, in turn, result in financial difficulties and an increase in liabilities.
There is also no direct impact on capital since capital refers to the owner's equity in the company. However, the loss of equipment can indirectly affect capital since it can lead to a decrease in revenue and profits, which can lower the value of the company and, in turn, decrease the value of the owner's equity.
Therefore, the most appropriate option is "a decrease in assets and capital" since the loss of equipment results in a direct decrease in assets and can indirectly impact capital.