Rosemary bought some advertising for $150 on her credit card. The part of the accounting equation which impacts is the liability and equity
Accounting refers to the financial transaction that is carried out by an individual .
It can be calculated as
Assets = Liabilities + Equity.
The accounts payable account is credited in the purchases journal whenever a person makes a credit purchase. As a result, the persons liabilities rise, which will be reflected in the balance sheet of the credit card until the debt is settled.
Thus both assets and liabilities will increase as a result of goods purchased on credit.
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