Land Was Originally Purchased for $20,000

question 3

Multiple Choice

Land was originally purchased for $20,000.It is sold for $20,000 in cash.How does the sale affect the accounting equation?

• A) Assets increase $20,000; liabilities decrease $20,000.
• B) Assets increase $20,000; liabilities increase $20,000.
• C) Assets increase $20,000; owner's equity increases $20,000.
• D) Assets increase $20,000; assets decrease $20,000.

---

Definitions:

Journal Entry

A record in accounting that represents a transaction and its effect on various accounts, ensuring the debits and credits balance.

Ledger

A book or collection of accounts in which account transactions are recorded and categorized to show changes in financial positions.

Total Debits

In accounting, this refers to the total sum of all debit entries recorded in all accounts for a given period.

Total Credits

The sum of all credit entries recorded in the accounting books of a business, reflecting the total value of transactions decreasing assets or increasing liabilities and equity.