If a Company Purchases Equipment Costing $4,500 on Credit, the Effect

Multiple Choice

If a company purchases equipment costing $4,500 on credit, the effect on the accounting equation would be:

A) Assets increase $4,500 and liabilities decrease $4,500.
B) Assets increase $4,500 and liabilities increase $4,500.
C) Equity decreases $4,500 and liabilities increase $4,500.
D) Equity increases $4,500 and liabilities decrease $4,500.
E) Liabilities decrease $4,500 and assets increase $4,500.