When an organization purchases a machine for cash, the following is true:

d. Total equity stays the same.

Here's the step by step explanation:

1. The organization spends cash to buy a machine. This means one asset (cash) decreases.

2. However, another asset (the machine) increases. The decrease in cash is offset by the increase in the value of the machine.

3. Therefore, the total assets of the company remain the same because the decrease in cash is balanced by the increase in machinery.

4. Liabilities are not affected by this transaction because the company is not borrowing money to buy the machine. They are using their own cash. So, total liabilities do not decrease.

5. Expenses are not directly affected by this transaction. The purchase of a machine is considered a capital expenditure, not an operating expense. So, total expenses do not increase.

6. Equity, which is assets minus liabilities, also stays the same. The total assets haven't changed, and the liabilities haven't changed, so equity remains the same.

Question

When an organization purchases a machine for cash, the following is true:

d. Total equity stays the same.

Here's the step by step explanation:

1. The organization spends cash to buy a machine. This means one asset (cash) decreases.

2. However, another asset (the machine) increases. The decrease in cash is offset by the increase in the value of the machine.

3. Therefore, the total assets of the company remain the same because the decrease in cash is balanced by the increase in machinery.

4. Liabilities are not affected by this transaction because the company is not borrowing money to buy the machine. They are using their own cash. So, total liabilities do not decrease.

5. Expenses are not directly affected by this transaction. The purchase of a machine is considered a capital expenditure, not an operating expense. So, total expenses do not increase.

6. Equity, which is assets minus liabilities, also stays the same. The total assets haven't changed, and the liabilities haven't changed, so equity remains the same.

Knowee AI · Accepted Answer

When an organization purchases a machine for cash, the following is true:

d. Total equity stays the same.

Here's the step by step explanation:

1. The organization spends cash to buy a machine. This means one asset (cash) decreases.

2. However, another asset (the machine) increases. The decrease in cash is offset by the increase in the value of the machine.

3. Therefore, the total assets of the company remain the same because the decrease in cash is balanced by the increase in machinery.

4. Liabilities are not affected by this transaction because the company is not borrowing money to buy the machine. They are using their own cash. So, total liabilities do not decrease.

5. Expenses are not directly affected by this transaction. The purchase of a machine is considered a capital expenditure, not an operating expense. So, total expenses do not increase.

6. Equity, which is assets minus liabilities, also stays the same. The total assets haven't changed, and the liabilities haven't changed, so equity remains the same.

When an organisation purchases a machine for cash, which of the following is true?Question 3Select one:a.Total assets increase.b.Total liabilities decrease.c.Total expenses increase.d.Total equity stays the sam

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