Question

Xu Company acquired office equipment valued at $4,000 and office supplies valued at $600 by paying cash of $1,300 with the balance on account. The effect of this transaction on the company’s accounting equation would be to

Group of answer choices

decrease the cash account by $1,300, increase the accounts payable account by $3,300, increase the office equipment account by $4,000, and increase the office supplies account by $600.

increase the cash account by $1,300, increase the accounts payable account by $3,300, and increase the office equipment account by $4,600.

increase the office equipment account by $4,600, decrease the cash account by $1,300, and decrease the accounts payable account by $3,300.

increase the cash account by $1,300, increase the capital stock account by $3,300, decrease the equipment account by $4,000, and increase the office supplies account by $600.

Answer 1

Correct Answer : Option A
Reason:
1. decrease the cash account by $ 1,300, increase the accounts payable account by $ 3,300, increase the office equipment account by $ 4,000 , and increase the office supplies account by $ 600.
2. Correct Entry would be:
Journal Entry
	Debit	Credit
Office equipment	4000
Office supplies	600
Cash		1300
Accounts Payable		3300	(4600-1300)