Accord Corporation purchased land for $100,000 by making a cash payment of $30,000 and promising to pay the remaining amount in a later accounting period.What is the net effect of this transaction on Accord's accounting equation?

Question

Quizplus · Accepted Answer

The land purchase increases assets by $100,000. The cash payment decreases assets by $30,000, and the remaining $70,000 is a liability, increasing liabilities by $70,000.

Accord Corporation Purchased Land for $100,000 by Making a Cash