4 POINTS What is the effect on the accounting equationwhen a company purchases inventory oncredit?(a) Assets increase, liabilities decrease(b) No effect on the accounting equation(c) Assets increase, liabilities increase(d) Assets decrease, equity decreases

Explanation of Assets:Assets are resources owned by a business that have economic value and can be…

Answered: What is the effect on the accounting…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter3: Analyzing And Recording Transactions

Section: Chapter Questions

Problem 26MC: What is the impact on the accounting equation when an accounts receivable is collected? A. both...

See similar textbooks

Similar questions

What is the impact on the accounting equation when a sale occurs? A. both sides increase B. both sides decrease C. only the Asset side changes D. neither side changes
Which of the following is not an element of the financial statements? A. future potential sales price of inventory B. assets C. liabilities D. equity
Which of the following is a measurement of earnings that represents the profit before interest, taxes, depreciation and amortization are subtracted? A. net income B. retained earnings C. EBITDA D. EPS
How are unusual or infrequent gains or losses reported on a company's income statement?
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.
Which of the following accounts would not be reported under revenue on a simple income statement? A. interest revenue B. net sales C. rent revenue D. operating expenses
What is the impact on the accounting equation when stock is issued, in exchange for assets? A. both sides increase B. both sides decrease C. only the Asset side changes D. neither side changes
What is the effect on the accounting equation?
1. If a company purchases inventory on account, what type of accounts are affected? (i.e., assets. liabilities, revenues. expenses, equity ? Explain Briefly.
What financial metric measures a company's ability to cover its short-term obligations with its most liquid assets and is calculated by excluding inventory from the current assets? A. Quick ratio B. Current ratio C. Inventory turnover ratio D. Return on assets ratio
Which one of the following accounts is unlikely to ever be seperately disclosed in the income statement? O A. Cost of sales O B. Bad debts O C. Interest on current bank account O D. Depreciation
If a company purchases inventory with cash, does the total asset balance change ? Explain briefly.

SEE MORE QUESTIONS

Recommended textbooks for you

Principles of Accounting Volume 1

Accounting

ISBN:

9781947172685

Author:

OpenStax

Publisher:

OpenStax College

Intermediate Accounting: Reporting And Analysis

Accounting

ISBN:

9781337788281

Author:

James M. Wahlen, Jefferson P. Jones, Donald Pagach

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

Intermediate Accounting: Reporting And Analysis

Accounting

ISBN:

9781337788281

Author:

James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:

Cengage Learning

College Accounting, Chapters 1-27

Accounting

ISBN:

9781337794756

Author:

HEINTZ, James A.

Publisher:

Cengage Learning,

Managerial Accounting

Accounting

ISBN:

9781337912020

Author:

Carl Warren, Ph.d. Cma William B. Tayler

Publisher:

South-Western College Pub

Financial And Managerial Accounting

Accounting

ISBN:

9781337902663

Author:

WARREN, Carl S.

Publisher:

Cengage Learning,

Financial Accounting Intro Concepts Meth/Uses

Finance

ISBN:

9781285595047

Author:

Weil

Publisher:

Cengage

SEE MORE TEXTBOOKS

What is the effect on the accounting equation when a company purchases inventory on credit? (a) Assets increase, liabilities decrease (b) No effect on the accounting equation (c) Assets increase, liabilities increase (d) Assets decrease, equity decreases