Question

If a company purchases supplies on account, this transaction would result in:

-Total assets decreasing.
-Liabilities increasing
-Equity decreasing.
-Contributed capital increasing.

Answer 1

Purchasing supplies on account would result in liabilities increasing for the company.

Step-by-step explanation:

When a company purchases supplies on account, it means that they are buying supplies and deferring payment until a later date. This transaction would result in liabilities increasing because the company now owes money to the supplier. However, it does not directly affect total assets, equity, or contributed capital.