Question

a company purchases supplies on account for 2200. indicate the amount of increases and decreases in the accounting equation

Answer 1

See the explanation.

Step-by-step explanation:

We know,

Account equation, asset = liabilities +owner's equity. A company purchases supplies on account for $2200.

Journal entries of this transaction are as follows:

Supplies debit $2200

Accounts payable credit $2200

Supplies are an asset account. Supplies increase the asset side.

Accounts payable is a liability account. Accounts payable increases the liability side.

Therefore, a transaction can increase an asset and a liability side.