Question

What effects does this journal entry have on the accounts? decrease cash and increase land decrease cash and decrease land increase cash and increase land increase cash and decrease land?

Answer 1

Answer:

Decrease cash and increase land

Explanation:

The transaction is:

Account             Debit        Credit

Land                $105,000

Cash                                  $105,000

Purchased land for business.

Both land and cash are assets: they are debited when they increased, and they are credited when they decrease.

Because cash was used to purchase the land, cash decreases and land increases.