If an asset is purchased on credit. what is the effect on the accounting equation?a) Assets increase; liabilities increaseb) Assets decrease: equity decreasesc) Liabilities decrease: equity increasesd) No effect on the accounting equation

Explanation of Asset: An asset is a resource owned by a business that has economic value and is…

Answered: If an asset is purchased on credit.…

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter2: Analyzing Transactions: The Accounting Equation

Section: Chapter Questions

Problem 3CE: What are the effects of the following transactions on the accounting equation? Indicate an increase...

See similar textbooks

Similar questions

Exchanges of assets for assets have what effect on equity? A. increase equity B. may have no impact on equity C. decrease equity D. There is no relationship between assets and equity.
What is the impact on the accounting equation when a payment of account payable is made? A. both sides increase B. both sides decrease C. only the Asset side changes D. neither side changes
How are gain contigencies reported in the financial statements? a. a contingent account receivable b. an accrued revenue c. a deferred revenue d. not at all
Which should be subtracted from the net income when using the indirectmethod? A. Loss on sale of investmentB. Amortization of patentC. Increase in accounts receivableD. Increase in accounts payable
The payment of past debt by the entity will cause a decrease in asset due to the outflow of cash, and what corresponding effect on liabilities? a. No effect b. Decrease c. The transaction would cause no effect on both accounts. d. Increase
Which of the following assets would not be included as a quick asset? a.Merchandise inventory b.Cash c.Temporary investments d.Accounts receivable
Which of the following items will not be shown in the balance sheet of ahotel? A. customer loyalty value B. accounts payable C. Intangible assets D. accrued taxes
True or false Credits Increases in liabilities and revenue. Decrease in assets and expenses?
What is the impact on the accounting equation when an accounts receivable is collected?A. both sides increaseB. both sides decreaseC. only the Asset side changesD. the total of neither side changes
Which of the following would be included in the financing section? A. loss on sale of investments B. depreciation expense C. increase in notes receivable D. decrease in notes payable
What are the effects of the following transactions on the accounting equation? Indicate an increase (+) or decrease () under the affected asset, liability, and owners equity headings.
Expenses represent outflows of assets or increases in liabilities as a result of efforts to produce revenues.

SEE MORE QUESTIONS

Recommended textbooks for you

College Accounting, Chapters 1-27

Accounting

ISBN:

9781337794756

Author:

HEINTZ, James A.

Publisher:

Cengage Learning,

Principles of Accounting Volume 1

Accounting

ISBN:

9781947172685

Author:

OpenStax

Publisher:

OpenStax College

Cornerstones of Financial Accounting

Accounting

ISBN:

9781337690881

Author:

Jay Rich, Jeff Jones

Publisher:

Cengage Learning

College Accounting, Chapters 1-27

Accounting

ISBN:

9781337794756

Author:

HEINTZ, James A.

Publisher:

Cengage Learning,

Principles of Accounting Volume 1

Accounting

ISBN:

9781947172685

Author:

OpenStax

Publisher:

OpenStax College

Cornerstones of Financial Accounting

Accounting

ISBN:

9781337690881

Author:

Jay Rich, Jeff Jones

Publisher:

Cengage Learning

Financial Accounting Intro Concepts Meth/Uses

Finance

ISBN:

9781285595047

Author:

Weil

Publisher:

Cengage

SEE MORE TEXTBOOKS

If an asset is purchased on credit. what is the effect on the accounting equation? a) Assets increase; liabilities increase b) Assets decrease: equity decreases c) Liabilities decrease: equity increases d) No effect on the accounting equation