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 the balance in the Cash account shifts the value from one asset (cash) to another (equipment), keeping the total assets unchanged.

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