A business purchases equipment for $8,000 cash. Which of the following accounts is debited?

Question

Quizplus · Accepted Answer

When a business purchases equipment for cash, the account that gets debited is Equipment. This is because the equipment is an asset, and the rule of accounting is that assets increase with debits. Cash is already an asset and there is no change in it, so it is not debited in this transaction. Accounts Payable is a liability account and is not relevant in this transaction, and Common Stock is a stockholders' equity account and is also not relevant.

A Business Purchases Equipment for $8,000 Cash