Murphy Corporation had originally purchased land for $38,000.It later sold it for $38,000 in cash.Which of the following is true of the effect of the sale of land on the accounting equation?

Question

Quizplus · Accepted Answer

The sale of land for the same amount at which it was purchased does not result in any change in the accounting equation. The assets decrease by $38,000 (land) and the assets increase by $38,000 (cash), resulting in no net change in the total assets. Liabilities and equity are not affected by the transaction. Therefore, the amount of total assets remains the same.

Murphy Corporation Had Originally Purchased Land for $38,000