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The purchase of an asset on credit will:

A. increase total assets and decrease total liabilities. B. have no effect on total assets or total liabilities. C. increase total assets and increase total liabilities. D. increase total assets and increase owner’s equity

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Question added by SREEDEVI SUNILKUMAR
Date Posted: 2014/03/12
Anil Lalwani
by Anil Lalwani , Chief Accountant , Al Ahli Hospital

The answer will be C, because JV will be as under:

Assets a/c Dr.

 To Supplier

Debit asset means add assets and credit liability means add liability

Mark John Domingo
by Mark John Domingo , General Accountant , Palma Holding

C

Mohamed Yehya
by Mohamed Yehya , Accounts Receivable Supervisor , Nextcare Health Care

(c)

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