The purchase of an asset for cash will:
A) not affect total assets, liabilities, and owners' equity.
B) increase total assets and increase total liabilities.
C) increase total assets and increase total owners' equity.
D) increase total assets.

Question

Quizplus · Accepted Answer

Purchasing an asset for cash decreases one asset (cash) while increasing another (the purchased asset), leaving total assets unchanged. Liabilities and owners' equity are not affected by this transaction.

The Purchase of an Asset for Cash Will