During the month you purchased $12,000 of supplies on credit and $19,000 of equipment for cash.When you prepare a balance sheet,assets are $24,000 more than liabilities plus shareholders' equity.

Question

Quizplus · Accepted Answer

The purchase of supplies on credit should increase accounts payable, which is a liability, by $12,000. If this was posted as a debit instead of a credit, it would cause an imbalance in the accounting equation, leading to the $24,000 discrepancy.

During the Month You Purchased $12,000 of Supplies on Credit