Question

Select the correct answer.

Kruger Trading Inc. buys goods on credit. In which two accounts will the company post this transaction after entering it into the journal?

Answer 1

с. Purchases and Creditors

Multiple choices

A. Goods and Cash

В.Goods and Creditors

с. Purchases and Creditors

D.Purchases and Cash

Step-by-step explanation:

The purchase account is used to record purchased goods. Accountants and bookkeepers usually do not operate a goods account. When goods are purchased, they increase the purchases account.

Purchased goods are either paid in cash or on credit. Cash purchases reduce cash held in the business and are recorded in the cash account. Credit purchases increase liabilities and are recorded in the creditor's accounts.