Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 31 - No. 32)
What is the impact on the accounting equation when a business purchases office furniture with cash?
Assets increase, equity increases.
Assets increase, liabilities increase.
Assets increase, assets decrease.
Assets decrease, liabilities decrease.
Explanation
One asset (cash) decreases, and another asset (office furniture) increases; the total assets do not change.
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