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What would be the effect on the accounts if the business purchased equipment on account?
OA. An asset would be debited and a Liability credited.
OB. An asset would be debited and Liability debited.
Oc. An asset would be debited and an expense debited.
OD. Expense would be debited and Liability credited.

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Samawati

Answer:

A. An asset would be debited and a Liability credited.

Explanation:

Purchasing on account means buying on credit. The debts of the business increase. As a result,  liabilities increase.

Equipment is a business asset. Purchasing equipment increases assets.

In the double-entry accounting system, An increase in an asset is recorded by debiting the asset account. An increase in liabilities is captured by crediting the liabilities account.

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