Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 27 - No. 26)
When a company purchases office supplies on account, what is the effect on the accounting equation?
Assets increase, liabilities increase.
Assets decrease, liabilities increase.
Assets increase, liabilities decrease.
Assets decrease, equity increases.
Explanation
Office supplies (an asset) increase, and accounts payable (a liability) increase.
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