Bonnie's Baskets purchases $2,000 worth of office equipment on account.This causes:

Question

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Purchasing office equipment on account means that Bonnie's Baskets is not paying for the equipment in cash, but instead is creating a liability (Accounts Payable) to be paid off in the future. This increases the balance in Office Equipment (a long-term asset) and Accounts Payable (a current liability) on the balance sheet. Cash and Capital are not affected by this transaction.

Bonnie's Baskets Purchases $2,000 Worth of Office Equipment on Account