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.

Question

Quizplus · Accepted Answer

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.

Which of the Following Would Result If the Business Purchased