College Accounting (Book Only): A Career Approach
College Accounting (Book Only): A Career Approach
12th Edition
ISBN: 9781305084087
Author: Cathy J. Scott
Publisher: Cengage Learning
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Chapter 2, Problem 2A

What Would You Say?

A fellow accounting student has difficulty understanding how the fundamental accounting equation stays in balance when a compound entry with one debit and two credits is recorded. Consider, for example, that a business bought equipment for $7,000, paid $3,000 in cash, and placed the remainder on account.

This means that there are two credits and one debit—one debit and one credit on the left side of the equation and the other credit on the right side of the equation. Explain to your fellow student how the equation stays in balance.

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College Accounting (Book Only): A Career Approach

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