A business purchased supplies for cash.The business will decrease its Cash account and:

Question

Quizplus · Accepted Answer

The company purchased supplies now but will not use them until later.Under the expense recognition principle,the expense from using these supplies (Supplies Expense)is reported next month,when the supplies are used to earn revenue,not in the current month,when the supplies were purchased.This month,the supplies represent an asset (Supplies).

A Business Purchased Supplies for Cash