1. When a company purchases an asset on credit it a. increases expenses. b. decreases liabilities....

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1. When a company purchases an asset on credit it a. increases expenses. b. decreases liabilities. c. increases liabilities.

business accounting

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Answer 1

Answer #1

C. Increases Liabilities

When an asset is purchased on credit, the journal entry passed is as follows:

Asset Dr

To Creditors

This increases asset as well as Liability. There is no effect on expense.

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Answer 2

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1. When a company purchases an asset on credit it a. increases expenses. b. decreases liabilities....

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