Liam's Sporting Goods buys $35,000 of equipment on credit. Which of the following is a TRUE statement?
A) Total assets increase.
B) Total assets are unchanged.
C) Total liabilities decrease.
D) Total liabilities are unchanged.

Question

Quizplus · Accepted Answer

When Liam's Sporting Goods buys equipment on credit, their total assets increase because they now have a new asset (the equipment) even though they also have an equal amount of liabilities (the amount owed on credit).

Liam's Sporting Goods Buys $35,000 of Equipment on Credit