Conner Sales' total assets and total liabilities increased $400.The transaction could have been:
A)purchase of supplies for cash,$400.
B)purchase of supplies for $600 with a down payment of $200 and the remainder on account.
C)paid the rent for the month,$700.
D)None of these answers are correct.

Question

Quizplus · Accepted Answer

Option B involves a purchase of supplies for $600 with a down payment of $200 and the remainder on account. This would increase both assets (supplies) and liabilities (accounts payable) by $400, resulting in a net increase of $400 in both total assets and total liabilities. The other options (A and C) do not involve both an increase in assets and an increase in liabilities, and therefore do not explain the increase in both total assets and total liabilities. Option D is not a valid choice as there is a correct option.

Conner Sales' Total Assets and Total Liabilities Increased $400