If a company uses $1,300 of its cash to purchase supplies,the effect on the accounting equation would be:
A)Assets increase $1,300 and liabilities decrease $1,300.
B)One asset increases $1,300 and another asset decreases $1,300,causing no effect.
C)Assets decrease $1,300 and equity decreases $1,300.
D)Assets decrease $1,300 and equity increases $1,300.
E)Assets increase $1,300 and liabilities increase $1,300.

Question

Quizplus · Accepted Answer

When a company uses cash to purchase supplies, one asset (supplies) increases by $1,300 while another asset (cash) decreases by $1,300, resulting in no net effect on the overall assets.

If a Company Uses $1,300 of Its Cash to Purchase