Which of the following transactions would cause a change in equity?
A) Repayment of the principal on a bank loan.
B) Purchase of a delivery truck on credit.
C) Sale of land on credit for a price above cost.
D) Borrowing money from a bank.

Question

Quizplus · Accepted Answer

The sale of land on credit for a price above cost will result in a gain, which will increase equity. The repayment of a bank loan, borrowing money from a bank, and the purchase of a delivery truck on credit are all financing and investing activities that do not directly impact equity.

Which of the Following Transactions Would Cause a Change in Equity