Match Each Transaction with Its Effect on the Accounting Equation

question 139

Multiple Choice

Match each transaction with its effect on the accounting equation. Each letter may be used more than once.
-Purchased supplies on credit

• A)Increase assets, increase liabilities
• B)Increase liabilities, decrease owner's equity
• C)Increase assets, increase owner's equity
• D)No effect
• E)Decrease assets, decrease liabilities
• F)Decrease assets, decrease owner's equity

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Definitions:

Cash Flow from Assets

Represents the total amount of money being transferred in and out of a company's assets, encompassing operating, investing, and financing cash flows.

Operating Cash Flow

The cash generated by a company's normal business operations, indicating whether a company can generate enough positive cash flow to maintain and grow its operations.

Net Working Capital

The financial contrast between a company's short-term assets and its short-term obligations.

Fixed Assets

Long-term tangible assets used in the operation of a business that are not likely to be converted to cash in the short term, such as buildings, machinery, and equipment.