Using cash to purchase office supplies which will be consumed later results in an increase in expenses and a decrease in assets as of the time of purchase.

Question

Quizplus · Accepted Answer

Total assets remain unchanged from this transaction and no expense is recorded. The supplies are to be used later, thus the asset account of cash decreases by the same amount that the asset account of supplies increases. An expense is recorded as the supplies are consumed.

Using Cash to Purchase Office Supplies Which Will Be Consumed