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.
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 in the asset accounts Equipment and Cash.
Sooner purchased office supplies on account. the transaction would be record as: Debit Supplies; Credit Accounts Receivable WRONG Childers Service Company provides services to customers totaling $3 000 for which it billed the customers .
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 ...
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