Match Each Transaction with Its Effect on the Accounting Equation

question 213

Multiple Choice

Match each transaction with its effect on the accounting equation. Each letter may be used more than once.
-Paid cash for the purchase of supplies

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

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Definitions:

Current Liabilities

Short-term financial obligations that are due within one year or within a company's operating cycle.

Working Capital

The difference between a company's current assets and current liabilities, indicating the short-term financial health and efficiency.

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within one year or a business's operating cycle, whichever is longer.

Current Liabilities

Obligations or debts due for payment within one year.