Question

Scenario

On February 2nd, GBI purchased $800 of supplies for the marketing department (Cost Center Number is NAMK1000) to use in a trade show. Payment for the purchase was made on February 4th.

Your task

Enter the appropriate journal entries in the GBI ERP system to reflect the scenario described above. You will need two entries, one for the purchase and one for the payment. At the time of the purchase, the expense is recorded in the supplies expense account (740000) and the obligation is recorded in the Payables-Misc. account (300200). Payment for the full amount is made from the bank account (100000).

Record the resulting document numbers in the text field below:

FI document number 1: __________

FI document number 2: __________

Answer 1

Answer:

GBI

a. Journal Entries

Feb. 2

Debit Supplies Expense $800

Credit Payables-Misc. account $800

To record the purchase of supplies on account.

Feb. 4

Debit Accounts Payable $800

Credit CAsh $800

To record the payment on account.

b. The resulting document numbers are:

FI document number 1: __________ 100001

FI document number 2: __________ 100002

Explanation:

The journal entries are made to initially record the transactions in the books of GBI.  Journal entries identify the accounts involved in every transaction.  They add some brief narrations of the transaction.