Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 37 - No. 4)
What is the impact on the accounting equation when a business pays for inventory with cash?
Assets increase, and equity increases.
Assets increase, and assets decrease.
Assets decrease, and liabilities increase.
Assets decrease, and equity decreases.
Explanation
The cash (asset) is decreasing, and inventory (asset) is increasing.
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