Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 31 - No. 31)
What is the effect on the accounting equation when a company purchases equipment with cash?
Increases assets and increases owner's equity.
Decreases assets and increases owner's equity.
Increases assets and decreases assets.
Decreases assets and decreases owner's equity.
Explanation
Purchasing equipment with cash increases one asset (equipment) and decreases another (cash).
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