The ABC Company paid cash on account for supplies purchased last month. This would be recorded in the T-accounts as a:
A)debit Supplies and credit Accounts Payable.
B)debit to Accounts Payable and credit Cash.
C)debit Accounts Receivable and credit Cash.
D)debit Cash and credit Supplies.

Question

Quizplus · Accepted Answer

When a company pays cash on account for supplies previously purchased on credit, it reduces its liability (Accounts Payable) and its asset (Cash). Therefore, it debits Accounts Payable to decrease the liability and credits Cash to decrease the asset.

The ABC Company Paid Cash on Account for Supplies Purchased