Question

10 a company purchases supplies on account for $2,000. indicate the amount of increases and decreases in the accounting equation. note: decreases to account classifications should be entered as a negative. assets = liabilities + stockholders equity

Explanation:

Step1: Understand the transaction

The company purchases supplies on account. Supplies are assets and accounts - payable (owing for the supplies) is a liability.

Step2: Analyze asset change

Supplies (an asset) increase by $2,000. So, the change in assets is + 2000.

Step3: Analyze liability change

Accounts - payable (a liability) increases by $2,000 as the company owes for the supplies. So, the change in liabilities is + 2000.

Step4: Analyze stockholders' equity change

There is no impact on stockholders' equity from this transaction. So, the change in stockholders' equity is 0.

Answer:

Assets: + 2000
Liabilities: + 2000
Stockholders' Equity: 0