An asset would be debited and a liability credited if:
A)the business bought supplies for cash.
B)the business incurred an expense and paid it.
C)the business bought equipment on account.
D)None of these is correct.

Question

Quizplus · Accepted Answer

When a business buys equipment on account (meaning they do not pay for it immediately with cash), an asset (the equipment) would be debited and a liability (accounts payable or a loan payable) would be credited. Option A is incorrect because it would result in a decrease of cash (an asset) and an increase in supplies (another asset). Option B is incorrect because it would result in a decrease in cash (an asset) and an increase in an expense (another expense).

An Asset Would Be Debited and a Liability Credited If