Bell Company purchased supplies for $700 cash. Which of the following statements correctly shows the effect of this transaction on the accounting equation?

Question

Business

Leslie Cowan

24 May, 05:57

Bell Company purchased supplies for $700 cash. Which of the following statements correctly shows the effect of this transaction on the accounting equation?

+4

Answers (1)

Know the Answer?

Landyn Li · Answer 1

Supplies is an Asset so, purchasing supplies serves to increase that asset item: we add $700 to our current Assets

Cash is an Asset. We depleted $700 cash reserve to acquire supplies. We decrease $700 from our currents assets.

In the accounting equation : since we have an addition and a reduction to asset we have nill impact.