What should be done with the equipment account after an on-account purchase?

When an on-account purchase of equipment occurs, it signifies that the organization has acquired an asset but has not paid for it immediately, leading to an increase in the equipment account. Since equipment is classified as a long-term asset on the balance sheet, it is recorded by debiting the equipment account to reflect this increase.

The debit entry increases the balance of the equipment account, acknowledging that the organization now possesses additional equipment. This aligns with standard accounting practices where assets are debited to show their value on the books. Following this, a corresponding credit would typically be made to accounts payable, indicating the liability incurred because it was purchased on account and not paid for upfront.

In summary, debiting the equipment account accurately reflects the new equipment acquired by the organization, demonstrating a rise in assets without affecting the cash account at the point of purchase.