A business purchases supplies on account. The entry to record this transaction is:
A)Debit to Supplies; Credit Accounts Receivable
B)Debit Supplies; Credit Accounts Payable
C)Debit Supplies; Credit to Cash
D)Debit to Cash; Credit Supplies

Question

Quizplus · Accepted Answer

When a business purchases supplies on account, it means that they are getting supplies and agreeing to pay for them at a later date. This is a liability for the business and is recorded as a credit to Accounts Payable. The corresponding debit is for the asset received, which in this case is Supplies. Therefore, the correct entry to record this transaction is to debit Supplies and credit Accounts Payable.

A Business Purchases Supplies on Account