Question

If a company uses $1,500 of its cash to purchase supplies, the effect on the accounting equation would be:

Answer 1

Assets increase $1,500

liabilities increase $1,500.

Step-by-step explanation:

Based on the information given in a situation where the company make uses of the amount of $1,500 of its cash to purchase supplies which means that the the effect on the accounting equation would be: Assets increase with amount of $1,500 while liabilities on the other hand will increase with amount of $1,500 reason been that Cash is an asset which will increase the assets because it was used to purchase supplies leading to increase in liabilities.