The purchase of an asset on account and making a partial payment results in all of the following EXCEPT
A) an increase in an asset account.
B) a decrease in the Cash account.
C) a balanced accounting equation.
D) an increase in owner's equity.

Question

Quizplus · Accepted Answer

When an asset is purchased on account and a partial payment is made, it results in an increase in an asset account (for the asset purchased), a decrease in the Cash account (due to the partial payment), and the accounting equation remains balanced through the increase in liabilities (for the portion purchased on account) and the decrease in assets (cash). However, this transaction does not directly affect the owner's equity unless it impacts net income, which is not indicated in the given options.

The Purchase of an Asset on Account and Making a Partial