A transaction caused a $60,000 increase in both assets and total liabilities.This transaction could have been which of the following?
A)Purchase for office equipment for $60,000 cash.
B)Purchase of office equipment for $120,000,paying $60,000 cash and issuing a note payable for the balance.
C)Repayment of a $60,000 bank loan.
D)Investment of $60,000 cash in the business by the owner.

Question

Quizplus · Accepted Answer

Option A would only increase assets, not liabilities. Option C would decrease liabilities, not increase them. Option D would only increase assets, not liabilities. Option B fits the description as it increases both assets (office equipment) and total liabilities (note payable).

A Transaction Caused a $60,000 Increase in Both Assets and Total