During March,Honeybaked Spam purchased supplies for cash.The supplies will be used in April.What effect does this transaction have on the accounting equation at the time the supplies are purchased?

Question

Quizplus · Accepted Answer

Purchasing supplies for cash decreases the cash account (an asset) while increasing the supplies account (also an asset), leaving the total assets unchanged. The accounting equation (Assets = Liabilities + Shareholders' Equity) remains balanced as there is no change in liabilities or shareholders' equity.

During March,Honeybaked Spam Purchased Supplies for Cash