GB 518 Course Great Wisdom / tutorialrank.com GB 518 Course Great Wisdom / tutorialrank.com | Page 22

Question 6. Question :
Apatha Company has assets of
$600,000, liabilities of $250,000 and equity of $350,000. It buys
office equipment on credit for $75,000. The effects of this
transaction include:

Assets increase by $75,000 and expenses
increase by $75,000

Assets increase by $75,000 and expenses
decrease by $75,000

Liabilities increase by $75,000 and expenses
decrease by $75,000
Assets decrease by $75,000 and expenses
decrease by $75,000

Assets increase by $75,000 and liabilities
increase by $75,000