Exercise 1-12 Identifying effects of transactions on the accounting equation LO P1 Select a transaction that effects the accounting equation as follows: Effects Transaction 1. Decreases an asset and decreases equity The company workers car wages this period but are not paid until next period. 2. Increases an asset and increases a liability The owner withdraws cash from the business. 3. Decreases an asset and decreases a liability. The company purchases supplies for cash. 4. Increases an asset and decreases an asset. The company purchases equipment on credit. 5. Increases a liability and decreases equity. The company pays cash toward an account payable. 6. Increases an asset and increases equity The owner invests cash in the business F transactions on the accounting equation LO P1 ting equation as follows: Transaction The company workers earn wages this period but are not paid until next period. The company pays cash toward an account payable. The company purchases equipment on credit. The company purchases supplies for cash. The company workers earn wages this period but are not paid until next per The owner invests cash in the business. The owner withdraws cash from the business