If $9,600 cash and a $31,000 note payable are given in exchange for some office machines to be used in a business:
A)Total assets are increased.
B)Total liabilities are decreased.
C)Total assets are decreased.
D)The owners' equity is increased.

Question

Quizplus · Accepted Answer

When cash and a note payable are given in exchange for office machines, the total assets of the business are increased. The office machines are now part of the business's assets, and the cash and note payable are also assets that can be used to purchase additional assets or pay off liabilities. Liabilities are not decreased since a note payable is a liability, and owners' equity is not affected by this transaction.

If $9,600 Cash and a $31,000 Note Payable Are Given