The purchase of office equipment on credit increases total assets and total liabilities.

Name: The purchase of office equipment on credit increases total assets and total liabilities.
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Question

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When office equipment is purchased on credit, it increases total assets (due to the addition of the equipment) and also increases total liabilities (due to the debt owed to the creditor). Therefore, both total assets and total liabilities are increased.

The Purchase of Office Equipment on Credit Increases Total Assets