If a company purchases equipment costing 5,100 on credit, the effect on the accounting equation would be: Multiple Choice Assets increase 5,100 and liabilities decrease 5,100. Equity decreases 5,100 and liabilities increase 5,100. One asset increases 5,100 and another asset decreases 5,100. Assets increase 5,100 and liabilities increase 5,100 Equity increases 5,100 and liabilities decrease 5,100.

The correct answer is: Assets increase $\$ 5,100$ and liabilities increase $\$ 5,100$.<br /><br />Explanation: When a company purchases equipment costing $\$ 5,100$ on credit, it means that the company is acquiring an asset (the equipment) and also incurring a liability (the amount owed to the supplier). This transaction increases the assets by $\$ 5,100$ and also increases the liabilities by $\$ 5,100$.