If a company buys a $700 machine on account, this transaction will affect the
A)income statement and retained earnings statement only.
B)income statement only.
C)income statement, retained earnings statement, and balance sheet.
D)balance sheet only.

Question

Quizplus · Accepted Answer

The purchase of a machine on account affects only the balance sheet by increasing assets (machinery) and liabilities (accounts payable). It does not affect the income statement or retained earnings until the machine is used and expenses are recorded.

If a Company Buys a $700 Machine on Account, This