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Question: 1. Which accounts are affected? Supplies and Cash
2. How is each account classified? Supplies is an asset account. Cash is an asset account.
3. How is each classification changed? One asset (Supplies) increases and another asset (Cash) decreases.
4. How is each amount entered in the accounts? Assets increase on the debit side. Therefore, debit the asset account, Supplies. Assets decrease on the credit side. Therefore, credit the asset account, Cash.
Albany Trading operates in a very competitive field. To maintain its market position, it purchased two new machines for cash on 1 January 2011. It had previously rented its machines.
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