A business transaction creating an outflow of net assets resulting from the purchase of supplies is a(n):
A) cash disbursement.
B) equity transaction.
C) expense transaction.
D) income transaction.

Question

Quizplus · Accepted Answer

The purchase of supplies results in an expense transaction because it decreases the net assets of the business. It is not a cash disbursement because it does not necessarily involve the actual payment of cash at the time of the transaction. It is not an equity transaction because it does not affect the ownership of the business. It is also not an income transaction because it does not generate revenue for the business.

A Business Transaction Creating an Outflow of Net Assets Resulting