Asked by Gisselle Ochoa on May 04, 2024
Verified
Pat purchased $8,000 of new electronic equipment for her BJ Company on open account. The effect on the basic accounting equation was to:
A) increase Cash $8,000 and increase Equipment $8,000.
B) increase Equipment $8,000 and increase Accounts Payable $8,000.
C) decrease Cash $8,000 and increase Accounts Payable $8,000.
D) decrease Cash $8,000 and increase Equipment $8,000.
Basic Accounting Equation
Assets = Liabilities + Owner’s Equity.
Electronic Equipment
Electronic equipment encompasses devices or systems that use electrical power to perform a wide range of functions, including computing, communication, and entertainment.
Accounts Payable
Refers to the amount a company owes to suppliers or vendors for goods and services received but not yet paid for.
- Comprehend the effects of buying and selling activities on business financial records.
- Comprehend the use of the accounting equation in commercial activities.
Verified Answer
MG
Mireya GarciaMay 05, 2024
Final Answer :
B
Explanation :
Purchasing equipment on account increases Equipment (an asset) and increases Accounts Payable (a liability), with no immediate effect on Cash.
Learning Objectives
- Comprehend the effects of buying and selling activities on business financial records.
- Comprehend the use of the accounting equation in commercial activities.