A furniture company purchases a new milling machine costing $350 000 on account. Which of the following statements is true?
A)This transaction would be recorded in the purchases book and would include a credit to Cash.
B)This transaction would be recorded in the cash payments book and would include a debit to Purchases.
C)This transaction would be recorded in the general journal and would include a credit to Payables/Creditors.
D)This transaction would be recorded in the general journal and would include a credit to Equipment.

Question

Quizplus · Accepted Answer

The purchase of a milling machine on account is recorded in the general journal with a debit to Equipment and a credit to Payables/Creditors, as it increases assets and liabilities.

A Furniture Company Purchases a New Milling Machine Costing $350