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21 February, 09:05

Genesis Company buys equipment for $900 on credit. This transaction will immediately affect: a) the income statement only. b) income statement, retained earnings statement, and balance sheet. c) income statement and retained earnings statement only. d) balance sheet only.

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  1. 21 February, 10:19
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    Answer: D. balance sheet only

    Explanation: The transaction will immediately affect the "balance sheet only" not the income statement or retained earnings.

    Balance sheet shows the business net worth. Balance sheet shows the financial position of a business listing the liabilities and assets and owners equity at a particular time.

    So Genesis buying a new equipment on credit will show in its balance sheet.
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