Which of the following would result if a business purchased Equipment with a 40% down payment and the rest on open account?
A) Equipment would increase and Cash would decrease.
B) Accounts Payable would increase.
C) Since the equipment has not been paid in full, there is nothing to record.
D) Both A and B are correct.

Question

Quizplus · Accepted Answer

When a business purchases equipment with a 40% down payment and the rest on open account, Equipment (an asset) increases by the full purchase price, Cash decreases by the amount of the down payment, and Accounts Payable increases by the remaining balance, reflecting the obligation to pay the seller in the future. Therefore, both A and B are correct.

Which of the Following Would Result If a Business Purchased