Accounting for IGCSE & O level - Accounting Procedures (Section 22 - No. 29)
What is the impact on the accounting equation when a company purchases equipment with cash?
Assets increase, and owner's equity increases.
Assets decrease, and owner's equity decreases.
Assets increase, and liabilities increase.
One asset increases, and another asset decreases.
Explanation
One asset (cash) decreases, while another asset (equipment) increases; no net change.
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