Question

Green Company purchased a piece of machinery on credit for $10,000. Briefly state the way this

transaction affects the company’s basic accounting equation.​

Answer 1

Answer:

Introduction to the Concept(s) to be used in the solution:

About Accounting Equation:

There are three components of an accounting equation:

1. Assets

2. Liabilities

3. Shareholders’(Owners’) equity

Every business activity will affect one or two or all three of the components of accounting equation simultaneously. The consistency of total balance of assets and total balance of liabilities and shareholders’ (owners’) equity ensures the accuracy of an accounting equation.

Therefore,

Financial and Managerial Accounting(14th Edition)Solutions for Chapter 2Problem 1BE: Green Company purchased a piece of

machinery on credit for $10,000. Briefly state the way this

transaction affects the company’s basic accounting equation.

Explanation:

I hope it helps you

Answer 2

Answer:

                   assets = liabilities + owner equity

                   10000 = 10000 +  0

                   1000 =  10000

Explanation:

as we know that from the accounting equation

    assets = liabilities + owner equity

when the company purchase machinery on credit its assets(machinery) increase by $10000 on the other hand account payable also increase by 10000.