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no effect cause only additional supplies dan increase liability
may be increase because we can purchase significant amount of goods in exchange for an equity
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
3. No effect
The effect of this transaction will increase liabilities (account payables) and inventory hence no effect on owner's equity.
No effect..................................
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.
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