O-LevelAccountingThe fundamentals of accounting7707/12 · Oct/Nov 2024 · Q21 Mark

A trader bought new fixtures. He paid half the purchase price in cash and agreed to pay the balance at a later date. How does this purchase affect the accounting equation?

Aassets: decrease, owner's equity: decrease, liabilities: no effect

Bassets: decrease, owner's equity: no effect, liabilities: increase

Cassets: increase, owner's equity: decrease, liabilities: increase

Dassets: increase, owner's equity: no effect, liabilities: increase

✓ Correct answer

D: assets: increase, owner's equity: no effect, liabilities: increase

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Topic: The fundamentals of accounting, O-Level Accounting (syllabus 7707). Multiple choice, 1 mark.
Source: O-Level Accounting, Oct/Nov 2024 Paper 1 Variant 2, question 2.

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A trader bought new fixtures. He paid half the purchase price in cash and agreed to pay the balance at a later date. How does this purchase affect the accounting equation?

✓ Correct answer

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