What is the result of recording the acquisition of equipment?
A) An increase in both cash and fixed assets.
B) An increase in fixed assets and a decrease in cash.
C) An increase in both cash and liabilities.
D) An increase in cash and a decrease in fixed assets.

Question

Quizplus · Accepted Answer

When equipment is acquired, there is an increase in fixed assets as the company now possesses a new asset. At the same time, cash is used to purchase the equipment, resulting in a decrease in cash. Therefore, the correct choice is B - an increase in fixed assets and a decrease in cash.

What Is the Result of Recording the Acquisition of Equipment