A purchase of a vehicle for cash would have what affect on the accounting equation?
A) Total asset amount remains the same.
B) Total liabilities are overstated.
C) Total owner's equity is overstated.
D) Both A and B are correct.

Question

Quizplus · Accepted Answer

A purchase of a vehicle for cash would increase the asset account (vehicles) and decrease the cash account by the same amount. Therefore, the total asset amount remains the same and there is no impact on liabilities or owner's equity.

A Purchase of a Vehicle for Cash Would Have What