[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? What Is the Effect on a Fundamental Accounting Equation if Supplies Are Purchased on an Account ? by Joseph DeBenedetti The purchase of supplies impacts all parts of the accounting equation . Accounting Equation. The accounting equation is assets equal liabilities plus equity (assets=liabilities+equity ). The equity account is sometimes called the capital account stockholder's account or owner's equity account. Equity is what the owner of the company owes or owns. The owner can be an individual partners a group or stockholders. An accounting transaction is a business activity or event that causes a measurable change in the accounting equation . An exchange of cash for merchandise is a transaction. Merely placing an order for goods is not a recordable transaction because no exchange has taken place. If a company uses $1 500 of its cash to purchase supplies the effect on the accounting equation would be: A - Assets increase $1 500 and liabilities increase $1 500. B - Assets decrease $1 500 and equity increases $1 500. C - One asset increases $1 500 and another asset decreases $1 500 causing no effect . The effect of this transaction on the accounting equation ...

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