Which of the following can be an effect of a transaction that increased an asset of a business for the accounting equation to balance?
A)there is an equal decrease in another asset
B)there is an equal decrease in equity
C)there is an equal decrease in a liability account
D)both liabilities and equity decrease

Question

Quizplus · Accepted Answer

According to the accounting equation, Assets = Liabilities + Equity. Increasing an asset without any corresponding increase in liabilities or equity would cause the equation to become imbalanced. Therefore, there must be a corresponding decrease in another asset to maintain the equation's balance.

Which of the Following Can Be an Effect of a Transaction