question 2\na company purchased equipment for $150,000 cash. what is the effect on total assets?\n a…

question 2\na company purchased equipment for $150,000 cash. what is the effect on total assets?\n a. increase\n b. no net effect\n c. decrease\n d. cannot be determined from this limited information.

question 2\na company purchased equipment for $150,000 cash. what is the effect on total assets?\n a. increase\n b. no net effect\n c. decrease\n d. cannot be determined from this limited information.

Answer

Explanation:

Step1: Identify asset - types involved

Cash and equipment are both assets.

Step2: Analyze the transaction

Cash (an asset) decreases by $150,000 and equipment (an asset) increases by $150,000.

Step3: Calculate net effect on total assets

The decrease in one asset is offset by the increase in another asset. So, the net effect on total assets is $150000 - 150000=0$.

Answer:

B. no net effect