Question

What's the correct entry for $100 purchase of supplies on credit?

a. Debit Cash: $100 & Credit Supplies: $100
b. Debit Accounts Payable: $100 & Credit Cash: $100
c. Debit Supplies: $100 & Credit Accounts Payable: $100
d. Debit Accounts Payable: $100 & Credit Supplies: $100
e. Debit Accounts Receivable: $100 & Credit Cash: $100

Answer 1

Answer:

c. Debit Supplies: $100 & Credit Accounts Payable: $100

Explanation:

When we purchase supplies on credit this has the following effect :

Assets : Will Increase thus Debit Supplies with $100

Liabilities : Will Increase thus Credit Accounts Payable with $100

Conclusion :

The correct entry is c. Debit Supplies: $100 & Credit Accounts Payable: $100