The Dexter Company received a billfor P4,000 form the Janice Companyfor the purchase of office equipment.Dexter Company is postponingpayment of the bill until a later date.The effect on the accountingequation isa decrease in office equipment and anincrease in accounts payablea decrease in cash and an increase in officeequipmentan increase in office equipment and anincrease in capitalan increase in accounts payable and anincrease in office equipmentWhen bank loan is paid, there will be adebit to loans payable accountdebit to cash accountcredit to capital accountO credit to loans payable account

Correct Answer :- D Explanation :-when business Purchase office equipment on credit it will…

Answered: a decrease in office equipment and an

Business

Accounting

a decrease in office equipment and an

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

The Dexter Company received a bill
for P4,000 form the Janice Company
for the purchase of office equipment.
Dexter Company is postponing
payment of the bill until a later date.
The effect on the accounting
equation is
a decrease in office equipment and an
increase in accounts payable
a decrease in cash and an increase in office
equipment
an increase in office equipment and an
increase in capital
an increase in accounts payable and an
increase in office equipment
When bank loan is paid, there will be a
debit to loans payable account
debit to cash account
credit to capital account
O credit to loans payable account

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