A company borrows money to purchase equipment,when:
A) one asset increases and another asset decreases
B) an asset increases and a liability increases
C) an asset decreases and a liability decreases
D) an asset decreases and owners' equity decreases.

Question

Quizplus · Accepted Answer

When a company borrows money, there is an increase in assets (equipment purchased with the borrowed money) and an increase in liabilities (the loan has to be repaid).

A Company Borrows Money to Purchase Equipment,when