Question

On Jan 31,2006, Allison Company purchased land for 8500. The purchase would cause total assets to-

1) -8500
2) + 8500
3) + 17000
4) wold not affect assets

Answer 1

The purchase of land would cause the company's total assets to increase by $8500.

Step-by-step explanation:

The subject of this question is Business and it pertains to the accounting concept of the impact of a land purchase on a company's assets.

In this case, Allison Company purchased land for $8500. Since land is considered an asset, the purchase of land would cause the company's total assets to + $8500 (option 2).

This transaction would increase the company's assets because the land purchase is an investment and adds value to the company's overall worth.