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If a company purchased a piece of equipment and paid for 1/2 of it then, and agreed to pay the other half next month, would the assets, liabilities, and equity decrease, increase, or have no effect
Expert Answer
Assets will increase and liabilities also increase and equity decreases.
The accounting equation is Assets = Liabilities + Owner’s Equity. Revenues causes Owner’s Equity to increase, and expenses cause Owner’s Equity to decrease.
