Equipment is sold for cash in an amount equal to the cost of the equipment recorded on the books.How does this sale affect the accounting equation?

Question

Quizplus · Accepted Answer

When equipment is sold for cash in an amount equal to its recorded cost, the asset Equipment decreases by the same amount as the increase in Cash. Therefore, one asset (Equipment) decreases and one asset (Cash) increases, resulting in a change in different accounts on the same side of the accounting equation. This is reflected in choice A where "one asset increases; one asset decreases."

Equipment Is Sold for Cash in an Amount Equal to the Cost