If a company purchases equipment for cash:
A)Assets will increase and owners' equity will also increase.
B)Assets will increase and owners' equity will decrease.
C)Assets will increase and owners' equity will remain unchanged.
D)Total assets and owners' equity will remain unchanged.

Question

Quizplus · Accepted Answer

When a company purchases equipment for cash, one asset (equipment) increases while another asset (cash) decreases, leaving total assets unchanged. Owners' equity remains unchanged because the transaction involves only asset accounts.

If a Company Purchases Equipment for Cash