Purchasing property and equipment with cash affects the accounts by?

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Multiple Choice

Purchasing property and equipment with cash affects the accounts by?

Explanation:
Buying property and equipment with cash is an asset-to-asset exchange. You reduce cash (a current asset) and increase property and equipment (a fixed asset) by the same amount. Total assets stay the same at the time of purchase, and there’s no change in liabilities or equity (aside from depreciation that would occur over time, which affects equity later). So the immediate effect is to increase equipment and decrease cash.

Buying property and equipment with cash is an asset-to-asset exchange. You reduce cash (a current asset) and increase property and equipment (a fixed asset) by the same amount. Total assets stay the same at the time of purchase, and there’s no change in liabilities or equity (aside from depreciation that would occur over time, which affects equity later). So the immediate effect is to increase equipment and decrease cash.

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