Question

Anudu, Inc. sold equipment and received more cash than the equipment's book value. The effect of this sale on the accounting equation includes a(n) ______. (Check all that apply)

a) increase to assets
b) increase to stockholders' equity
c) decrease to stockholders' equity
d) decrease to liabilities

Answer 1

When Anudu, Inc. sold equipment and received more cash than the equipment's book value, it resulted in an increase in assets and an increase in stockholders' equity.

Step-by-step explanation:

When Anudu, Inc. sold equipment and received more cash than the equipment's book value, it resulted in an increase in assets and an increase in stockholders' equity. The increase in assets is because Anudu, Inc. received more cash, which is considered an asset. The increase in stockholders' equity is because selling the equipment for more than its book value increases the company's net worth, which is reflected in the stockholders' equity.

Therefore, the correct options are:

1. A. Increase in assets
2. B. Increase in stockholders' equity