If a company purchases equipment on account:
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)Assets will increase and liabilities will decrease.

Question

Quizplus · Accepted Answer

When a company purchases equipment on account, its assets increase due to the addition of the equipment, and its liabilities increase because the purchase on account creates a payable. Owners' equity remains unchanged in this transaction.

If a Company Purchases Equipment on Account