Select the entry that correctly records the purchase by Speedy Window Cleaning of 15 months worth of cleaning supplies from Southern Cleaning. The purchase is for cash and the invoiced amount is $1500. Ignore GST.

Question

Quizplus · Accepted Answer

The entry correctly records the purchase by debiting the cleaning supplies asset account for the cost of the supplies and crediting the bank account for the cash paid. This will increase the asset account and decrease the bank account by the same amount, reflecting the transaction accurately. Option A records the purchase as an expense, which is incorrect as the supplies are an asset until they are used. Option B records the purchase as a credit to the cleaning supplies asset, which is incorrect as the supplies have been purchased, not sold. Option D records the purchase as an expense, which is incorrect as the supplies are an asset until they are used.

Select the Entry That Correctly Records the Purchase by Speedy