When it goes on sale for $1,600, Mikah buys a new plasma television that is valued at $1,800. He takes $300 from his savings account to use as a down payment and finances the rest. Choose the true statement.

Mikah adds a television worth $1,800 to his assets and uses $300 from savings, reducing his cash assets by $300. His total assets therefore increase by $1,800 − $300 = $1,500. The amount he finances is a liability, not a reduction in his assets.

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