Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 23 - No. 37)
What is the effect on the accounting equation when a company sells goods on credit?
Assets increase, liabilities decrease.
Assets increase, owner's equity decreases.
Assets increase, owner's equity increases.
Assets decrease, owner's equity decreases.
Explanation
An increase in assets in the form of accounts receivable and owner's equity from the sale.
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