Purchase of machinery for cash:Question 3Answera.Decreases total assetsb.Increases assets and liabilitiesc.Increases total assetsd.Keeps total assets unchanged

Question

Purchase of machinery for cash:Question 3Answera.Decreases total assetsb.Increases assets and liabilitiesc.Increases total assetsd.Keeps total assets unchanged
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Solution 1

The correct answer is d. Keeps total assets unchanged.

Here's why:

When a company purchases machinery for cash, it is essentially converting one type of asset (cash) into another type of asset (machinery). The total value of the company's assets remains the same, because the decrease in cash is of Knowee AI StudyGPT is a powerful AI-powered study tool designed to help you to solve study prob

Knowee AI StudyGPT is a powerful AI-powered study tool designed to help you to solve study problem.
Knowee AI StudyGPT is a powerful AI-powered study tool designed to help you to solve study problem.
Knowee AI StudyGPT is a powerful AI-powered study tool designed to help you to solve study problem.
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