The effect on the balance sheet of a business buying supplies for cash is to:
A) increase asset supplies; decrease asset bank.
B) decrease asset supplies; increase asset bank.
C) increase asset supplies; increase asset bank.
D) decrease asset supplies; decrease asset bank.

Question

Quizplus · Accepted Answer

When a business buys supplies for cash, its supplies (an asset) increase because it now has more supplies, and its cash or bank balance (also an asset) decreases because it has spent money.

The Effect on the Balance Sheet of a Business Buying