Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 41 - No. 44)
If a company is making a purchase of equipment, which of the following will happen?
Debit equipment amount, credit bank amount
Debit bank amount, credit equipment amount
Debit equipment amount, debit bank amount
Credit equipment amount, credit bank amount
Explanation
The equipment account would be debited (increased) since the business is gaining an asset, and the bank account would be credited (decreased) since the business is using its money to purchase the asset.
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