Question

Carl cornfield purchases new equipment. After reducing the cash line, where else would carl put an entry for this purchase?

Cash assets
Equipment assets
Other assets (includes receivables)
Liabilities
Owners equity
Choose best answer.

Answer 1

Equipment Assets

Explanation:

Answer 2

The correct answer is:

Equipment assets.

Explanation:

After this equipment purchase, we would need to subtract the amount of the purchase from the cash line, to represent the money spent on the purchase.

Additionally, however, we would need to add the value of the equipment to the equipment assets of the business. The value of the equipment increases the amount of the equipment assets of the business.