Transaction 3: Purchase of Office Supplies

The e-learning agency buys stationery and other office supplies that the company will use in the future, agreeing to pay $500 within 30 days. This transaction increases both the assets and liabilities of the business, as follows:

ASSETS LIABILITIES OWNERS EQUITY

Cash	+	Office Supplies	+	Land		Accounts Payable	+	Sheena Bright, Capital
Bal								?
10,000				?
		?			=	?
		?		?		?		?

Office supplies is an asset, not an expense, because the supplies can be used in the future. The liability created by this transaction is an Account payable. A payable is always a liability.