Katelyn purchased $10,000 of new electronic equipment for her DJ Company on account.The effect on the basic accounting equation was to:

Question

Quizplus · Accepted Answer

When Katelyn purchased new electronic equipment on account, her equipment account increased by $10,000. At the same time, her accounts payable account also increased by $10,000 because she now owes money to the vendor for the equipment. This is a liability and increases the liabilities side of the accounting equation. Therefore, option B is the correct answer.

Katelyn Purchased $10,000 of New Electronic Equipment for Her DJ