On January 14, Edamame Industries purchased supplies of $700 on account. The entry to record the purchase will include
A) a debit to Supplies and a credit to Accounts Payable.
B) a debit to Supplies Expense and a credit to Accounts Receivable.
C) a debit to Supplies and a credit to Cash.
D) a debit to Accounts Receivable and a credit to Supplies.

Question

Quizplus · Accepted Answer

When supplies are purchased on account, it means that the company has received the supplies but has not yet paid for them. Therefore, the entry to record the purchase will include a debit to Supplies (an increase in assets) and a credit to Accounts Payable (an increase in liabilities).

On January 14, Edamame Industries Purchased Supplies of $700 on Account