A transaction caused a $200,000 increase in both assets and total liabilities. This transaction could have been:
A) Purchase for office equipment for $200,000 cash
B) Repayment of a $200,000 bank loan
C) Investment of $200,000 cash in the business by the owner
D) Purchase of office equipment for $240,000, paying $40,000 cash and issuing a note payable for the balance

Question

Quizplus · Accepted Answer

The purchase of office equipment for $240,000, paying $40,000 cash and issuing a note payable for the balance, is the only transaction that increases both assets and liabilities by $200,000.

A Transaction Caused a $200,000 Increase in Both Assets and Total