The purchase of equipment costing $19,500 for $1,500 down and the balance on account will increase both sides of the Statement of Financial Position Statement of Financial Position equation by $18,000.

Question

Quizplus · Accepted Answer

The purchase of equipment increases the assets side of the equation by $18,000 (the cost of the equipment minus the down payment) and the liabilities side of the equation by $18,000 (the balance on account). Therefore, both sides of the equation increase by 18,000 and the statement is true.

The Purchase of Equipment Costing $19,500 for $1,500 Down and the Balance