A purchase of a vehicle for cash would have which effect on the accounting equation?
A. Total asset amount remains the same.
B. Total liabilities are overstated.
C. Total owner’s equity is overstated.
D. Both A and B

Question

A purchase of a vehicle for cash would have which effect on the accounting equation?
  A. Total asset amount remains the same. 	
  B. Total liabilities are overstated. 	
  C. Total owner’s equity is overstated. 	
  D. Both A and B

anonymous · Answer

@satellite73 @Purplerainbowcherry @Whitemonsterbunny17

anonymous · Answer

Cash  is a what? Asset or liability?

anonymous · Answer

idk  i thought it was capital

anonymous · Answer

liability??

anonymous · Answer

Cash is an asset. What about a car asset or liability?

anonymous · Answer

Assets are things you own. Liabilities are things you owe.

anonymous · Answer

oh! ok so a car is an assets

anonymous · Answer

Yes..so when you buy a car with cash you are simply replacing one asset with another of the same value. So what would the answer to your question be?

anonymous · Answer

$\color{aqua}A$

anonymous · Answer

Good job

anonymous · Answer

thank you! could u help me with some more ??

anonymous · Answer

OK