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What effect would the issuance of common stock have on the accounting equation? Assets and liabilities would increase. Assets and stockholders' equity would increase. Assets and stockholders' equity would decrease. Assets would increase and stockholders' equity would decrease. What effect would the purchase of inventory on account have on the accounting equation? Assets would increase and liabilities would decrease. Assets and liabilities would increase. Assets would increase and stockholders' equity would decrease. Assets and stockholders' equity would increase