Land originally purchased for $30,000 is sold for $62,000 in cash. What is the effect of the sale on the accounting equation?

A) assets increase by $62,000; owner's equity increases by $62,000
B) assets increase by $32,000; owner's equity increases by $32,000
C) assets increase by $62,000; liabilities decrease by $30,000; owner's equity increases by $32,000
D) assets increase by $30,000; no change in liabilities; owner's equity increases by $62,000

Accounting Equation

The fundamental formula in accounting that states assets equal liabilities plus shareholders' equity, representing a company's financial position.

Owner's Equity

The total value that would accrue to a business's owners after all liabilities are subtracted from all assets; also known as shareholder's equity or net worth.

Liabilities

Economic debts or obligations a company is responsible for, which are to be paid off over time through the exchange of economic advantages.