Which of the following transactions will cause an increase in assets and an increase in
Liabilities?

A. Office supplies are purchased for cash.
B. John Klein invests an additional $2,000 in his business.
C. Merchandise inventory is purchased on credit.
D. Goods are sold to a customer on account.

What do you think the answer is?

You need to think about the transaction and the accounts involved in each, and the one that affects both an asset and a liability is your answer.

I am not here to do your homework for you. I am here to assist you, which is what I did. I told you how to figure out the answer to the question.

For your information, the accounts that are affected by each transaction is as follows:
A. Office Supplies and Cash, both of which are Assets, Currents Assets to be precise.
B. Cash and Owners Equity or Owners Capital.
C. Merchandise Inventory and Accounts Payable, a current asset and a current liability.
D. Merchandise Inventory, Cost of Goods Solds, Sales Revenue, and Accounts Receivable, which are 2 current assets, a revenue account, and an expense account.

See if you did what I suggested and analyzed the transactions, you would have been able to figure out that the correct answer is C because the transaction affects an asset Merchandise Inventory and a purchase is an increase and a liability Accounts Payable because a pruchase on account increases a liabilility.

You need to think what is the question,what information is provided, and how to sove the problem with the information provided.

If you cannot figure this question on your own, I do not think you will be able to pass your accounting class.