The accounting equation for Cineo Enterprises is as follows: $$\frac{\text{ Assets }}{\$120,000}=\frac{\text{ Liabilities }}{\$60,000}+\frac{\text{ Owner’s Equity }}{\$60,000}$$ If Cineo purchases office equipment on account for $15000 the accounting equation will change to $\begin{array}{lccc}& \underline{\text{ Assets }}& \underline{\text{ Liabilities }}& \underline{\text{ Owner’s Equity }}\end{array}$
A) $\begin{array}{l}\$120,000=\$60,000+\$60,000\end{array}$
B) $\begin{array}{l}\$135,000=\$60,000+\$75,000\end{array}$
C) $\begin{array}{l}\$135,000=\$67,500+\$67,500\end{array}$
D) $\begin{array}{l}\$135,000=\$75,000+\$60,000\end{array}$

Accounting Equation

The fundamental equation of double-entry bookkeeping: Assets = Liabilities + Shareholder's Equity.

Office Equipment

Items purchased for use in conducting business operations, including computers, desks, and chairs.

Ownner's Equity

The portion of a company's assets that belongs to the owners or shareholders after liabilities are subtracted; also known as shareholder's equity.