Mayberry Company paid $30,000 cash to purchase land.What happened as a result of this business event?

Question

Quizplus · Accepted Answer

Paying cash to purchase land is an asset exchange transaction that decreases one asset (cash)and increases another asset (land);therefore,there is no overall effect on total assets,total liabilities,or total equity.It is reported as a cash outflow for investing activities on the statement of cash flows.

Mayberry Company Paid $30,000 Cash to Purchase Land