Pregunta
Multiple Choice Question Morris Lest, Inc. purchased machinery for \( \$ 10,000 \) cash. The effect of this transaction is to cause _O total liabilities to increase O total assets to increase assets to remain the same O total liabilities to decrease O total stockholders' equity to increase stockholders' equity to decrease
Ask by Wheeler Salazar. in the United States
Jan 25,2025
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The total assets remain the same.
Solución
When Morris Lest, Inc. purchases machinery for \$10,000 in cash, the transaction affects the company's balance sheet in the following way:
- **Cash (Asset)** decreases by \$10,000.
- **Machinery (Asset)** increases by \$10,000.
Since one asset decreases while another asset increases by the same amount, the **total assets remain unchanged**. There is no impact on liabilities or stockholders' equity because this transaction solely involves asset accounts.
**Correct Answer:**
O assets to remain the same
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Simplifique esta solución Beyond the Answer
When Morris Lest, Inc. purchased machinery for \$10,000 in cash, this transaction results in a company acquiring an asset (machinery) worth \$10,000, while simultaneously decreasing another asset (cash) by the same amount. This means total assets remain unchanged. The accounting equation (Assets = Liabilities + Stockholders' Equity) holds true here, as there is no change in total assets, liabilities, or stockholders’ equity as a result of the transaction. The correct answer is: **assets to remain the same.**
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