Burgundy Inc. purchased supplies on account for €26,000. This transaction will

Question

Quizplus · Accepted Answer

The purchase of supplies on account for €26,000 increases the assets (supplies) by €26,000 and increases the liabilities (accounts payable) by €26,000. This transaction increases both assets and liabilities, thus increasing both sides of the accounting equation (Assets = Liabilities + Equity) by €26,000. Therefore, the correct answer is C- It increases assets and increases liabilities by €26,000.