Use this information to answer the following question. Here is the balance sheet for Costello Container Company:

-If the balance in the Cash account were used to buy more equipment,then the total assets would
A)remain unchanged.
B)increase by $8,000.
C)decrease by $8,000.
D)increase by $21,000.

Question

Use this information to answer the following question. Here is the balance sheet for Costello Container Company:

-If the balance in the Cash account were used to buy more equipment,then the total assets would
A)remain unchanged. 
B)increase by $8,000. 
C)decrease by $8,000. 
D)increase by $21,000.

Quizplus · Accepted Answer

Purchasing more equipment by using cash does not change the total amount of assets; it merely reallocates the existing assets from cash to equipment.

Use This Information to Answer the Following Question