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:

Accounts Payable

Liabilities of a business that represent its obligations to pay for goods or services it has received but not yet paid for.

Accounts Receivable

Money owed to a business by its clients or customers for goods or services provided on credit.

Statement of Cash Flows

A financial report detailing the cash inflows and outflows from operating, investing, and financing activities of a company over a period.

Borrowing

The act of receiving something from someone with the intention of returning it or its equivalent.