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The company purchases a significant amount of supplies on credit. The Owner`s Equity will?

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تم إضافة السؤال من قبل Imdad Hussain Rajput , Assistant Sales Manager , Forego
تاريخ النشر: 2015/08/04
Ahmed kandil
من قبل Ahmed kandil , Cost Controller , Battour Holding Cpompany

This transaction has not effect on Equity thanks

Bobby Sandy Hendrico Damanik
من قبل Bobby Sandy Hendrico Damanik , Junior manager , Saripari Pertiwi Abadi, PT

no effect cause only additional supplies dan increase liability

mohamed fares
من قبل mohamed fares , senior accountant , سيف الله مصطفى

may be increase because we can purchase significant amount of goods  in exchange for an equity

Muhammad Riaz
من قبل Muhammad Riaz , Senior Associate , Deloitte and Touche & Co.

To simply purchase the supplies for the company on a credit have no effect on owners equity because the owners equity will only be change if the supplies are sold to third party which result make profit for the company than the equity will increase 

مستخدم محذوف‎
من قبل مستخدم محذوف‎

3. No effect

 

The effect of this transaction will increase liabilities (account payables) and inventory hence no effect on owner's equity.

Wasim khan wazir
من قبل Wasim khan wazir , Finance Specialist , Mott Macdonald

No effect..................................

Ahmer Zamir
من قبل Ahmer Zamir , Consultant , Saleem Associates & Co

The correct option is3) No Effect.The rational of the answer is that the company only purchasing supplies as result onside increasing current asset and on the other side incurring the short term liability of A/P instead of increasing Owner's Equity.

المزيد من الأسئلة المماثلة