Alpha Company has assets of $640,000, liabilities of $270,000, and equity of $370,000. It buys office equipment on credit for $95,000. What would be the effects of this transaction on the accounting equation?
A. Assets increase by $95,000 and expenses increase by $95,000.
B. Assets increase by $95,000 and liabilities increase by $95,000.
C. Liabilities increase by $95,000 and expenses decrease by $95,000.
D. Assets decrease by $95,000 and expenses decrease by $95,000.
E. Assets increase by $95,000 and expenses decrease by $95,000.
Answer: B
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