Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 2 - No. 6)
What is the impact on the accounting equation if a company purchases supplies for cash?
a) Assets increase, liabilities increase.
b) Assets increase, equity increases.
c) Assets decrease, liabilities decrease.
d) Assets stay the same.
Explanation
Assets stay the same (one asset increases, another decreases).
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