What Is the Effect on the Balance Sheet of Recording

question 16

Multiple Choice

What is the effect on the balance sheet of recording a $200 cash purchase of raw materials?

• A) Assets decrease by $200 and stockholders' equity decreases by $200.
• B) Assets and stockholders' equity do not change.
• C) Assets increase by $200 and stockholders' equity increases by $200.
• D) Assets increase by $200 and stockholders' equity does not change.

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