Eon Movers purchases supplies for $1,200 cash.How would Eon record this transaction?

Question

Quizplus · Accepted Answer

Since Eon Movers paid for the supplies with cash, a debit should be made to their Supplies account to reflect the increase in assets, and a credit should be made to their Cash account to reflect the decrease in assets. Therefore, the correct entry would be to debit Supplies for $1,200 and credit Cash for $1,200. Option A is incorrect because it suggests that Eon Movers owes the supplier money, which is not the case since they paid cash. Option B is incorrect because it suggests that Eon Movers did not pay for the supplies, which is not the case. Option D is incorrect for the same reason as option A. Option E is incorrect because it suggests that Eon Movers purchased equipment, not supplies.

Eon Movers Purchases Supplies for $1,200 Cash