Asked by Ashley Pillatos on Apr 28, 2024
Verified
Bonnie's Baskets purchases $3,000 worth of office equipment on open account. This causes:
A) Cash and Capital to decrease.
B) Office Equipment and Accounts Payable to increase.
C) Office Equipment to decrease and Accounts Payable to increase.
D) Accounts Payable to increase and Capital to decrease.
Office Equipment
pertains to fixed, long-term assets used in an office environment for the business operations, such as computers, printers, and furniture, distinct from the broader term "equipment" by its office-specific use.
Open Account
A credit arrangement where the buyer pays the seller for goods or services at a later time, without the need for a formal loan agreement.
- Acquire knowledge on the impact of purchase and sale operations on the accounting of a business.
Verified Answer
NB
Nestle ButlerApr 30, 2024
Final Answer :
B
Explanation :
Purchasing office equipment on account increases Office Equipment (an asset) and Accounts Payable (a liability), reflecting the acquisition of assets on credit without immediately affecting cash or capital.
Learning Objectives
- Acquire knowledge on the impact of purchase and sale operations on the accounting of a business.