How does the purchase of office equipment on account affect the accounting equation?
A)Assets increase; liabilities decrease
B)Assets increase; owner's equity increases
C)Assets increase; liabilities increase
D)Liabilities increase; owner's equity decreases

Question

Quizplus · Accepted Answer

When office equipment is purchased on account, it means that the business has acquired an asset (office equipment) but has also incurred a liability (accounts payable) to the vendor. Therefore, the accounting equation will be affected by an increase in assets and an increase in liabilities.

How Does the Purchase of Office Equipment on Account Affect