Li Company paid cash to purchase land. As a result of this accounting event, which of the following statements is true?
A) Total assets decreased.
B) Total assets were unaffected.
C) Total stockholders' equity decreased.
D) Both assets and total stockholders' equity decreased.

Question

Quizplus · Accepted Answer

When Li Company paid cash to purchase land, it would increase the asset account "Land" and decrease the asset account "Cash" by the same amount, resulting in no change to the total assets. There is no effect on the stockholders' equity account.

Li Company Paid Cash to Purchase Land