Mellon Company purchases $1500 of equipment from Office Equipment Inc. for cash. The effect on the components of the basic accounting equation of Mellon Company is

A) an increase in assets and liabilities.
B) a decrease in assets and liabilities.
C) no change in total assets.
D) an increase in assets and a decrease in liabilities.

Basic Accounting Equation

The Basic Accounting Equation is the foundational principle of double-entry bookkeeping, stating that Assets = Liabilities + Equity, maintaining the balance of a company's financial statements.

Equipment

The tangible assets used in the operation of a business to perform specific tasks, excluding real estate and facilities.

Assets

Resources owned by a company that have economic value and can be used to meet debts, commitments, or legacies.