Transaction 3: Purchase of Office Supplies The e-learning agency buys stationery and other office supplies...
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Accounting
Transaction 3: Purchase of Office Supplies
The e-learning agency buys stationery and other office supplies that the company will use in the future, agreeing to pay $500 within 30 days. This transaction increases both the assets and liabilities of the business, as follows:
ASSETS LIABILITIES OWNERS EQUITY
| Cash | + | Office Supplies | + | Land |
| Accounts Payable | + | Sheena Bright, Capital |
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| 10,000 |
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Office supplies is an asset, not an expense, because the supplies can be used in the future. The liability created by this transaction is an Account payable. A payable is always a liability.
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