Purchasing office equipment on account would:
A)decrease owner's equity.
B)increase owner's equity.
C)have no effect on owner's equity.
D)decrease liabilities.

Question

Quizplus · Accepted Answer

Purchasing office equipment on account increases both assets (office equipment) and liabilities (accounts payable) without directly affecting owner's equity. The transaction is an exchange of one asset for another (from cash or its equivalent to a tangible asset) and an increase in liabilities, keeping the owner's equity unchanged at the moment of purchase.

Purchasing Office Equipment on Account Would