Final answer:
The effect on the accounting equation can be determined by analyzing the accounts that were debited and credited. In this case, the accounting equation is not balanced, as the assets are now 900 greater than the liabilities and the owner's equity has increased.
Step-by-step explanation:
The effect on the accounting equation can be determined by analyzing the accounts that were debited and credited. When an accountant debits an asset account, it increases the asset side of the equation, while when a liability account is credited, it decreases the liability side of the equation. In this case, since the asset account was debited and the liability account was credited, the accounting equation is not balanced. The asset side of the equation has increased by 900, while the liability side has decreased by 600.
Therefore, the assets are now 900 more than the liabilities. This represents an increase in the owner's equity or net worth of the business. To balance the equation, the owner's equity would need to increase by the same amount as the asset increase.
The effect on the accounting equation can be summarized as follows:
- The accounting equation is not balanced
- The assets are now 900 greater than the liabilities
- The owner's equity has increased