\begin{tabular}{l} Multiple Select Question \\ Select all that apply \\ When a company buys an asset on account: \\ \( \square \) assets decrease. \\ \( \square \) assets increase. \\ \( \square \) liabilities decrease. \\ \( \square \) liabilities increase. \\ \( \square \) cash decreases. \\ Need hels? Peviewth \\ \hline\end{tabular}

When a company purchases an asset **on account**, it means the company is acquiring the asset by incurring a liability (such as accounts payable) rather than paying cash immediately. Here's how each option is affected: - **☐ assets decrease.** *Incorrect.* Purchasing an asset increases the total assets on the balance sheet. - **☑ assets increase.** *Correct.* The new asset adds to the company's total assets. - **☐ liabilities decrease.** *Incorrect.* Buying on account typically **increases** liabilities because the company owes more to creditors. - **☑ liabilities increase.** *Correct.* The liability (e.g., accounts payable) increases as the company has an obligation to pay in the future. - **☐ cash decreases.** *Incorrect.* Since the purchase is made on account (credit), there is no immediate cash outflow. **Summary of Correct Choices:** - **Assets increase.** - **Liabilities increase.**