Eileen's Corner Shoppe purchases a desk for cash. This causes:
A) Cash and Capital to increase.
B) Furniture and Cash to increase.
C) Furniture to increase and Cash to decrease.
D) Accounts Payable to increase and Capital to increase.

Question

Quizplus · Accepted Answer

Purchasing a desk for cash increases the Furniture account (an asset) because the desk is a tangible asset now owned by the business. At the same time, Cash (another asset) decreases because cash is used to pay for the desk.

Eileen's Corner Shoppe Purchases a Desk for Cash