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College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570

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BuyFindarrow_forward

College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570
Textbook Problem

M. Parish purchased supplies on credit. What is the impact on the accounting equation?

  1. a. Increase Supplies and decrease Cash.
  2. b. Increase Supplies Expense and increase Accounts Payable.
  3. c. Increase Supplies Expense and increase Accounts Receivable.
  4. d. Increase Supplies and increase Accounts Payable.

To determine

Find the correct option, the option that increases the value of owners’ equity.

Explanation

Accounting equation: Accounting equation is a concept expressed in the form of equation, which creates a relation between resources or assets of a company and claims of resources to creditors and owners. Fundamental accounting equation is expressed as shown below:

Assets = Liabilities + Owners' EquityAssets = Liabilities+{(Owners' Capital)+(Owners' Withdrawals)+(Revenues)(Expenses)}

Transaction: Purchased supplies on account

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