Lim corporation purchases $10,000 of equipment for cash. the effect of this transaction is:_________

Answer

This transaction increases the company's equipment and decreases its cash balance by $10,000.

Identify the accounts impacted by the transaction. A: Cash and Equipment.
Determine the direction of the impact for each account. A: Cash decreases, Equipment increases.
Write the accounting equation and show how this transaction affects the equation. A: Assets = Liabilities + Owner's Equity. This transaction decreases assets (Cash) and increases assets (Equipment) by the same amount, so the equation stays in balance.