{"id":37628,"date":"2024-07-01T12:33:12","date_gmt":"2024-07-01T12:33:12","guid":{"rendered":"https:\/\/www.greatassignmenthelp.com\/questions\/?p=37628"},"modified":"2024-07-01T12:33:12","modified_gmt":"2024-07-01T12:33:12","slug":"a-purchase-of-supplies-on-account-should-be-recorded-as","status":"publish","type":"post","link":"https:\/\/www.greatassignmenthelp.com\/questions\/a-purchase-of-supplies-on-account-should-be-recorded-as\/","title":{"rendered":"A purchase of supplies on account should be recorded as:"},"content":{"rendered":"

A purchase of supplies on account should be recorded as:<\/p>\n

a) a debit to Supplies Expense and a credit to Cash.<\/p>\n

b) a debit to Accounts Payable and a credit to Supplies.<\/p>\n

c) a debit to Supplies Expense and a credit to Accounts Payable.<\/p>\n

d) a debit to Supplies Expense and a credit to Accounts Receivable.<\/p>\n

e) none of these.<\/p>\n

Answer: e) none of these.<\/strong><\/p>\n

<\/a> The correct account for a purchase of supplies on account is to record Supplies (an asset account) with a debited entry and Accounts Payable with a credited entry. This transaction involves purchasing stock (Supplies) on credit hence leading to the creation of account payable. Alternatively, breaking it down, the debit to Supplies raises an asset on the balance sheet to indicate more resources. It increases the credit of the Accounts Payable known as Account Payable\u2019s liability or the confirmation of the company\u2019s responsibility to pay. At the same time, this entry follows the business accrual concept and recognizes the expense only when the supplies are consumed, not when they were bought. One should remember that Supplies Expense does not change at the time of acquisition, but only when the supplies are used up, by the match principle.<\/p>\n","protected":false},"excerpt":{"rendered":"

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