If a company buys a $700 machine on credit, 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 credit affects the balance sheet by increasing assets (machinery) and liabilities (accounts payable) but does not affect the income statement or retained earnings statement at the time of purchase.

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