BUISENESS MANAGEMENT
MERCHANDISING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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a debit to Supplies and a credit to Accounts Payable.
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a debit to Supplies Expense and a credit to Accounts Receivable.
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a debit to Supplies and a credit to Cash
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a debit to Accounts Receivable and a credit to Supplies.
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Detailed explanation-1: -Answer and Explanation: Correct Answer: a. a debit to Supplies and a credit to Accounts Payable. A debit on the Supplies account will increase total assets, while a credit on Accounts Payable will increase total liabilities.
Detailed explanation-2: -Answer and Explanation: Explanation: A purchase of supplies on account is recorded as a debit to supplies expense and a credit to accounts payable.
Detailed explanation-3: -Purchase on Account Journal Entry When you make a purchase of supplies on account, you must prepare a journal entry that contains one debit and one credit. The debit is made to the supplies expense account, which is a temporary account used to record costs that will be displayed on the income statement.
Detailed explanation-4: -Accounting for Office Supplies When supplies are purchased, the amount will be debited to Supplies. At the end of the accounting period, the balance in the account Supplies will be adjusted to be the amount on hand, and the amount of the adjustment will be recorded in Supplies Expense.
Detailed explanation-5: -If you buy your supplies on credit, and it is a large enough amount that you are likely to use it over more than one accounting period, then your liabilities, in terms of accounts payable, increase, and your current assets increase as well.