A purchase of a vehicle on credit would have what effect on the accounting equation?
A) Total Assets and total Liabilities increase.
B) Total Liabilities are overstated.
C) Total Owner's Equity is overstated.
D) Both A and B are correct.

Question

Quizplus · Accepted Answer

When a vehicle is purchased on credit, it increases total assets (the vehicle) and total liabilities (the amount owed for the vehicle), keeping the accounting equation balanced.

A Purchase of a Vehicle on Credit Would Have What