if a company uses $ 1,340 of it's cash to purchase supplies, the effect on the...
if a company uses $ 1,340 of it's cash to purchase supplies, the effect on the account equation would be?
assets increase $1,340 and liabilities decrease $1340
one asset increases $1340 and another asset decreases $1340, causing no effect
assets decrease $1340 and equity decreases $1340
assets decrease $1340 and equity increases $1340
assets increase $1340 and liabilities increase $1340
Homework Answers
When a company used $1,340 cash to purchase supplies, it will have the following effects:
(i) Supplies will increase by $1,340
(ii) Cash will decrease by $1,340
Hence, second option i.e. one asset increases $1340 and another asset decreases $1340, causing no effect is correct.
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