Thursday, September 16, 2010

Accounting tricky question by evil teacher?

When a company buys equipment for $150,000 and pays for one third in cash and the other two thirds is financed by a note payable, the following are the effects on the equation

(2 points)









a.cash decreases by $50,000.

b.equipment increases by $100,000.

c.liabilities increase by $150,000.

d.total assets increase by $200,000.

e.All of the above effects occur on the equation.