Accord Company Purchased Land for $120,000 by Making a Cash

question 73

Multiple Choice

Accord Company purchased land for $120,000 by making a cash payment of $38,000 and promising to pay the remaining amount in a later accounting period.What is the net effect of this transaction on Accord's accounting equation?

• A)assets increase by $120,000 and liabilities decrease by $38,000
• B)assets increase by $120,000 and liabilities decrease by $82,000
• C)assets and equity increase by $82,000
• D)assets and liabilities increase by $82,000

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