[Answer] A company purchased supplies on account. What is the effect on the accounting equation?

Answer: I abilities increases;assets increase

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A company purchased supplies on account. What is the effect on the accounting equation? Purchased supplies for cash Increase assets and decrease assets What is the effect of the following transaction on the three elements ( assets liabilities and stockholders' equity … Equity is what the owner of the company owes or owns. The owner can be an individual partners a group or stockholders. You transform the office supplies expense account three times before you add its value to the accounting equation by combining the value with the equity account balance . If a company uses $1 520 of its cash to purchase supplies the effect on the accounting equation would be: One asset increases $1 520 and another asset decreases $1 520 causing no effect . If a company receives $11 800 from its sole stockholder to establish a corporation the effect on the accounting equation would be: Let’s check the accounting equation : Assets $30 000 (Cash $16 000 + Equipment $5 500 + Truck $8 500) = Liabilities $0 + Equity $30 000. 4. Purchased supplies on account . Metro purchased supplies on account from Office Lux for $500. Transaction analysis: The new corporation purchased new asset ( supplies ) for $500 but will pay for them later. The effect of this transaction on the accounting equation is: The accounting equation reflects that one asset increases and another asset decreases . Since the amount of the increase is the same as the amount of the decrease the accounting equation remains in balance. This transaction is recorded ...

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