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A company purchases supplies on account for $2,200. Indicate the amount of increases and decreases in the accounting equation.

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Samawati

Answer:

Assets increase by $2200:  liabilities increase by  $2200

Explanation:

The accounting equation is expressed as below.

Assets = Owners Equity + Liabilities.

Making purchases on account means buying on credit. Purchasing Supplies on credit will increases the debts( liabilities) of the company by $2200.

Supplies will belong to the business; hence assets will increase by $2200

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