Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 13 - No. 4)
If a business purchases equipment by paying a portion in cash and borrowing the rest, what is the effect on the accounting equation?
Assets increase, liabilities decrease.
Assets increase, liabilities increase.
Assets decrease, liabilities increase.
Assets increase, owner's equity decreases.
Explanation
Assets (Equipment) increase, Liabilities (Note Payable) increase.
Comments (0)
