Purchasing office supplies on account causes assets to increase and liabilities to increase.

Question

Quizplus · Accepted Answer

Purchasing office supplies on account means that the company is acquiring the supplies without immediately paying for them in cash. This increases the company's assets (the office supplies that are now owned) and also increases the company's liabilities (the amount owed to the supplier for the supplies). Therefore, both assets and liabilities increase.

Purchasing Office Supplies on Account Causes Assets to Increase and Liabilities