How does the purchase of equipment affect the accounting equation?

Accounting Dec 16, 2020

Expert Solution

The basic accounting equation is Assets = Liabilities + Equity

The purchase of equipment would not affect the accounting equation. The purchase of an equipment would only result to an increase in an asset (Equipment) and a decrease in another asset (Cash) in the same amount which would result to the same total amount of assets, liabilities and equity, and will not affect the basic accounting equation.

Archived Solution

Unlocked Solution

You have full access to this solution. To save a copy with all formatting and attachments, use the button below.

Already a member? Sign In

Important Note: This solution is from our archive and has been purchased by others. Submitting it as-is may trigger plagiarism detection. Use it for reference only.

For ready-to-submit work, please order a fresh solution below.

Or get 100% fresh solution

Get Custom Quote