Final answer:
The purchase of supplies on account for $1,500 increases MMM Pizza's total assets by the same amount in the form of supplies, while also increasing accounts payable as a liability.
Step-by-step explanation:
When MMM Pizza bought $1,500 of supplies on account, it affected the company's total assets by increasing both the supplies account (an asset) and the accounts payable (a liability). The supplies account is part of current assets, representing the tangible items that can be used for operations or sold. The accounts payable is a liability account representing the amount the company owes to its suppliers for these supplies on credit.
The purchase is a non-cash transaction; therefore, it does not immediately change the cash or bank balance. However, it does increase total assets by $1,500 because the supplies themselves are considered assets. In essence, the company's total assets increase in the form of supplies even as the liability (amount owed) also increases.