The account credited when supplies are purchased on account is:

Question

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When supplies are purchased on account, it means the company has not yet paid for the supplies. Thus, the account credited must be the liability account called Accounts Payable, which represents the company's obligation to pay its suppliers for the purchases made on credit. Option A is incorrect because cash was not used in the transaction. Option B is incorrect because the supplies were not paid for yet, so they cannot be considered an asset. Option C is incorrect because Supplies Expense represents the cost of supplies used up in the business, not the purchase itself.

The Account Credited When Supplies Are Purchased on Account Is