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The Effect on the Accounting Equation of the Business Purchasing

Question 4

Multiple Choice

The effect on the accounting equation of the business purchasing a new motor vehicle on credit for $35 500 is:

A) an increase in the asset Motor Vehicles of $35 500 and a decrease in the asset cash of $35 500.
B) an increase in the asset Motor Vehicles of $35 500 and a decrease in the liability accounts payable of $35 500
C) a decrease in the asset Motor Vehicles of $35 500 and an increase in the liability accounts payable $35 500
D) an increase in the asset Motor Vehicle of $35 500 and an increase in the liability accounts payable $35 500

Correct Answer: