When furniture is purchased by paying cash, the value of total assets will .

increase

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not change

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decrease

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Solution

The correct option is B not change
When furniture is purchased by paying money, cash account decreases and the furniture account increases. Since both are assets, there will be a nil impact on the value of total assets.

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Similar questions

Transactions of M/s. Vipin Traders are given below.

Show the effects on Assets, Liabilities and Capital with the help of accounting Equation.

		Rs
(a)	Business started with cash	1,25,000
(b)	Purchased goods for cash	50,000
(c)	Purchase furniture from R.K. Furniture	10,000
(d)	Sold goods to Parul Traders (costing Rs 7,000 vide bill no. 5674)	9,000
(e)	Paid cartage	100
(f)	Cash Paid to R.K. furniture in full settlement	9,700
(g)	Cash sales (costing Rs 10,000)	12,000
(h)	Rent received	4,000
(i)	Cash withdrew for personal use	3,000

1, 50, 000

Purchase of fixed assets will result in cash ___ from investing activities.

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