Conner Sales' total assets and total liabilities increased $500. The transaction could have been
A) purchase of supplies for cash, $500.
B) purchase of supplies for $600 with a down payment of $100 and the remainder on account.
C) paid the rent for the month, $600.
D) None of these answers are correct.

Question

Quizplus · Accepted Answer

Option B involves an increase in both assets (supplies purchased) and liabilities (amount owed on account), which could result in a $500 increase in the total of assets and liabilities. The other options would not result in an equal increase in both assets and liabilities.

Conner Sales' Total Assets and Total Liabilities Increased $500