How does the purchase of supplies on account affect the accounting equation?
A) Assets increase; Liabilities decrease
B) Assets increase; Owner's Equity increases
C) Assets increase; Liabilities increase
D) Liabilities increase; Owner's Equity decreases

Question

Quizplus · Accepted Answer

When supplies are purchased on account, the company's assets (supplies) increase because it has more supplies, and its liabilities increase because it owes money for those supplies. This reflects a direct relationship between the increase in assets and the increase in liabilities, with no immediate effect on owner's equity.

How Does the Purchase of Supplies on Account Affect the Accounting