Asked by Haimanti Bhattacharyya on May 16, 2024
Verified
Which of the following would result if the business purchased equipment for cash?
A) Supplies would increase and Cash would decrease.
B) Supplies would increase and Capital would increase.
C) Equipment would increase and Cash would decrease.
D) The purchase of supplies is not a business transaction.
Equipment
Tangible, long-term assets used in the operations of a business, not intended for sale.
Supplies
Supplies are consumable items used in the everyday operations of a business, such as office materials, that are not resold to customers.
- Evaluate transactions to identify their influence on the accounting equation.
- Comprehend the principle of acquiring assets and its effect on the accounting equation.
Verified Answer
DD
diana dominguezMay 18, 2024
Final Answer :
C
Explanation :
Equipment would increase as an asset on the balance sheet because it is being added to the company's resources. Cash would decrease because it is being used to purchase the equipment, resulting in a decrease in the company's liquid assets.
Learning Objectives
- Evaluate transactions to identify their influence on the accounting equation.
- Comprehend the principle of acquiring assets and its effect on the accounting equation.