[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? 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: 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 . 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. If a company uses $1 500 of its cash to pu...

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