Apatha Company has assets of $600,000,liabilities of $250,000,and equity of $350,000.It buys office equipment on credit for $75,000.The effects of this transaction include:
A)Assets increase by $75,000 and expenses increase by $75,000.
B)Assets increase by $75,000 and expenses decrease by $75,000.
C)Liabilities increase by $75,000 and expenses decrease by $75,000.
D)Assets decrease by $75,000 and expenses decrease by $75,000.
E)Assets increase by $75,000 and liabilities increase by $75,000.

Question

Quizplus · Accepted Answer

Buying office equipment on credit increases the asset balance (office equipment) by $75,000 and the liability balance (accounts payable) by $75,000. This transaction does not affect expenses or equity.

Apatha Company Has Assets of $600,000,liabilities of $250,000,and Equity of $350,000.It