Question

What is the impact on the Accounting Equation when Rosemary buys a $500 printer ON ACCOUNT from Dwight at Dunder-Mifflin?

a) Assets increase; Liabilities increase
b) Assets increase; Owner's equity increases
c) Assets decrease; Owner's equity decreases
d) Liabilities decrease; Owner's equity increases

Answer 1

When Rosemary buys a $500 printer on account, the impact on the Accounting Equation is: assets increase and liabilities increase.

Step-by-step explanation:

When Rosemary buys a $500 printer on account from Dwight at Dunder-Mifflin, the impact on the Accounting Equation is: a) Assets increase; Liabilities increase

Buying the printer increases the assets of Rosemary's business because she now has a printer worth $500. At the same time, the purchase creates a liability because Rosemary owes Dwight $500 for the printer.