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Homework answers / question archive / How does the purchase of equipment affect the accounting equation?
How does the purchase of equipment affect the accounting equation?
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.