Question

Purchase of machine by cash means –
a. Decrease in asset and decrease in liability

b. Increase in asset and decrease in asset

c. Increase in asset and decrease in liability

d. Decrease in asset and increase in capital​

Answer 1

Answer:

increase in assets and decrease in assets

Explanation:

because machinery is being purchased and payment is made by cash.

So machinery is dr and cash is cr.

Answer 2

Answer:  Option B is correct Purchase of machine by cash implies rise in assets and decline in assets.

Explanation: The acquisition of machinery for cash maintains total assets constant because machine and cash both are recorded under assets. Cash falls under current assets, while the equipment is classified as non-current.neither the overall assets nor obligations are impacted. An rise in non-current assets, such as a factory, property, or machinery, results from the cash acquisition of an asset. On the other hand, the currency account, a present asset, will experience a corresponding decline. Purchase of Equipment. This purchase will have an impact on both the currency account and the machinery account. As a result, since machinery will grow and cash will decrease, the overall assets won't change. Yes, both fixed assets and current assets will alter.

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