Speedy Window Cleaning purchased 12 months worth of cleaning supplies on credit from Southern Cleaning Supplies for $1500. Which of the following represents the effect on the accounting equation?

Question

Quizplus · Accepted Answer

The purchase of cleaning supplies on credit increases Speedy Window Cleaning's assets by $1500 (an increase in supplies), but also increases liabilities by $1500 (an increase in accounts payable to Southern Cleaning Supplies). There is no impact on equity since it is a credit transaction. Therefore, the correct answer is C.

Speedy Window Cleaning Purchased 12 Months Worth of Cleaning Supplies