Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 36 - No. 50)
What happens when a company pays for equipment with cash?
Debit bank, credit equipment.
Debit equipment, credit bank.
Debit equipment, credit cash.
Debit cash, credit equipment.
Explanation
Equipment is an asset and is debited (increased). Cash is used, reducing the balance (credit).
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