ABC Company bought some computers for $10,000 and charged them. What happens to the accounting equation? Group of answer choices Assets and liabilities increase by $10,000. Assets do not change. Liabilities increase by $10,000 and owners' equity decreases by $10,000. Assets and owners' equity increase by $10,000.
ABC Company bought some computers for $10,000 and charged them. What happens to the accounting equation? Group of answer choices Assets and liabilities increase by $10,000. Assets do not change. Liabilities increase by $10,000 and owners' equity decreases by $10,000. Assets and owners' equity increase by $10,000.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
ABC Company bought some computers for $10,000 and charged them. What happens to the
Group of answer choices
Assets and liabilities increase by $10,000.
Assets do not change.
Liabilities increase by $10,000 and owners' equity decreases by $10,000.
Assets and owners' equity increase by $10,000.
Expert Solution
Step 1
| Purchase of Computer for Cash increases one Asset (Equipment) and decreases another Asset (Cash). | |||
|
The net effect on Assets is nil. Equipment account is debited and Cash account is credited. |
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