Bell Company purchased supplies for $700 cash. Which of the following statements correctly shows the effect of this transaction on the accounting equation?

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Janiya

Business

30 July, 07:22

Bell Company purchased supplies for $700 cash. Which of the following statements correctly shows the effect of this transaction on the accounting equation?

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Orlando Valentine · Answer 1

Supplies is an Asset so, purchasing supplies serves to increase that asset item: we add $700 to our current Assets

Cash is an Asset. We depleted $700 cash reserve to acquire supplies. We decrease $700 from our currents assets.

In the accounting equation : since we have an addition and a reduction to asset we have nill impact.