Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 27 - No. 19)
What is the impact on the accounting equation when a business purchases inventory for cash?
Assets increase, liabilities increase.
Assets decrease, liabilities decrease.
Assets increase, equity increases.
Assets stay the same.
Explanation
One asset (cash) decreases, and another asset (inventory) increases. The total assets remain the same.
Comments (0)
