A transaction completed by Norton Company caused a $4,000 increase in both the total assets and the total liabilities.This transaction could have been:
A)purchase of office equipment for $12,000,paying $8,000 cash,with the rest on account.
B)investment by the owner of an additional $4,000.
C)purchase of office equipment,paying $4,000 cash,and $8,000 on account.
D)a loan of $5,000,on a $9,000 purchase of equipment with $4,000 down payment.

Question

Quizplus · Accepted Answer

The transaction described in option A involves purchasing office equipment for $12,000, paying $8,000 in cash, and the remaining $4,000 on account. This increases both assets (equipment) and liabilities (accounts payable) by $4,000.

A Transaction Completed by Norton Company Caused a $4,000 Increase