Alpha Company Has Assets of $600,000, Liabilities of $250,000, and Equity

question 39

Multiple Choice

Alpha Company has assets of $600,000, liabilities of $250,000, and equity of $350,000. It buys office equipment on credit for $75,000. What would be the effects of this transaction on the accounting equation?

• A) Assets increase by $75,000 and liabilities increase by $75,000.
• B) Liabilities increase by $75,000 and expenses decrease by $75,000.
• C) Assets increase by $75,000 and expenses decrease by $75,000.
• D) Assets increase by $75,000 and expenses increase by $75,000.
• E) Assets decrease by $75,000 and expenses decrease by $75,000.

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Definitions:

Biceps Brachii

A muscle of the upper arm that flexes the elbow and rotates the forearm, consisting of two heads (long and short) originating from the shoulder and attaching to the forearm.

Flexor Carpi Ulnaris

A muscle of the forearm that acts to flex and adduct the wrist.

Metacarpal Bones

The five long bones in the hand that are connected to the carpals (wrist bones) and the phalanges (fingers).

Palmaris Longus

A muscle of the forearm that is involved in the flexion of the wrist and can be used as a tendon graft site.