Asked by Kimberly Valencia-Franco on Jun 28, 2024
Verified
A company purchased supplies for cash,which will be consumed during future months.Which of the following correctly describes the impact of the supplies purchase on the financial statements?
A) Total assets will remain unchanged.
B) Total assets will decrease.
C) Operating expenses will increase.
D) Operating income will decrease.
Total Assets
The sum of all resources owned by a company, measured in terms of monetary value, as listed on the balance sheet.
Operating Expenses
Costs associated with the day-to-day operations of a business, excluding direct costs of producing goods or services.
- Acquire knowledge of the effects that cash and accrual transactions have on financial documentation.
Verified Answer
YS
Yeshi SeldonJun 29, 2024
Final Answer :
A
Explanation :
The purchase of supplies for cash does not impact total assets as it only involves an exchange of one asset (cash) for another asset (supplies).
Learning Objectives
- Acquire knowledge of the effects that cash and accrual transactions have on financial documentation.
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