How does the purchase of supplies on account affect the accounting equation?

A) Assets increase; Liabilities decrease
B) Assets increase; Owner's Equity increases
C) Assets increase; Liabilities increase
D) Liabilities increase; Owner's Equity decreases

Accounting Equation

The fundamental equation of accounting, Assets = Liabilities + Shareholder's Equity, representing the relationship between a company's resources and claims against those resources.

Supplies

Items that are consumed or used up in the daily operations of a business, like office supplies or manufacturing materials.

Account

A record in the financial statements that represents a specific asset, liability, equity, revenue, or expense, used to track the changes in those balances.