A company that purchases supplies on credit will A. none of the above B. increase its...
A company that purchases supplies on credit will
| A. |
none of the above |
|
| B. |
increase its liabilities |
|
| C. |
increase its equity |
|
| D. |
decrease it equity |
Homework Answers
When supplies are purchase on credit, it has the following effects:
(i) Assets increase in the form of supplies.
(ii) Liabilities increase in the form of accounts payable.
Thus, a company that purchase supplies on credit will increase its liabilities.
Correct option is B.
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