Question

A purchase of a vehicle on credit would have what effect on the accounting equation? O A. Total Owner's Equity is overstated. O B. Total Liabilities are overstated O C. Total Assets and total Liabilities increase O D. Both A and B are correct. Click to select your answer. 1T ype here to search

Answer 1

Solution 1:

Purchase of vehicle on credit would have effect on accounting equation "Total assets and total liability increase"

Hence option C is correct.

Solution 2:

Items owned by the business such as Land, Supplies and equipment are assets.

Hence option A is correct.

Solution 3:

The purpose of accounting process is to provide financial information about:

1. Sole proprietorship

2. Large corporations

3. Small businesses

Hence option d "All of these answers are correct" is correct.

Solution 4:

If OI "Fashion toys" revenues are greater than its expenses during the accounting period, "The business will earn a net income"

Hence option D is correct.